The GBPUSD daily chart presents a bullish trend characterized by impulsive price movement, indicating continued strength. Currently, the market is unfolding orange wave 5 within the broader navy blue wave 1 cycle. This positioning signals that GBPUSD is in the final stage of an impulsive advance, typically suggesting strong upward momentum.

The end of orange wave 4 signals the beginning of wave 5, generally associated with the final leg of an impulse sequence. The next key wave to observe will be navy blue wave 2, expected to be a corrective move following the completion of wave 5.

It is important to monitor the invalidation level at 1.31425. A drop below this level would negate the current wave scenario, prompting a reassessment of the bullish outlook. Until that occurs, the structure supports a continuation of the upward move.

Conclusion

GBPUSD is poised for potential further gains as wave 5 progresses. While buying interest appears strong, traders should be cautious and watch for reversal signals since this represents the final wave of the navy blue wave 1 structure.

GBP/USD Elliott Wave technical overview

Function: Counter Trend.

Mode: Corrective.

Structure: Gray Wave 2.

Position: Orange Wave 3.

Direction (Next higher degree): Gray Wave 3.

Details: Gray wave 1 appears complete, and gray wave 2 is now unfolding. The invalidation level is set at 1.31425.

Analysis summary

The 4-hour chart of GBPUSD shows a corrective phase developing within a counter-trend setup. This movement is interpreted as gray wave 2 forming within the larger orange wave 3 cycle. The price action indicates a typical retracement, often seen before the trend resumes.

Gray wave 1 is considered complete, shifting the focus to the current correction under gray wave 2. This wave typically retraces a segment of wave 1's movement, allowing the market to consolidate. Once completed, gray wave 3 is expected to resume the dominant trend direction.

The structure suggests GBPUSD may trade within a range or experience minor pullbacks before the upward trend picks up again. The invalidation point at 1.31425 remains key; a move below this level would void the current Elliott Wave outlook.

Conclusion

GBPUSD is currently navigating a corrective wave (gray wave 2), implying temporary consolidation within a longer-term bullish sequence. Traders should closely observe the development of this wave for signs of completion, ahead of a potential move into gray wave 3.

GBP/USD Elliott Wave technical overview [Video]

Author

Peter Mathers

TradingLounge

Peter Mathers started actively trading in 1982. He began his career at Hoei and Shoin, a Japanese futures trading company.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.