GBP/USD Elliott Wave technical overview
Function: Bullish Trend.
Mode: Impulsive.
Structure: Orange Wave 5.
Position: Navy Blue Wave 1.
Direction (Next higher degree): Navy Blue Wave 2.
Details: Orange wave 4 appears completed, and orange wave 5 is now active. The invalidation level for this wave count is 1.31425.
Analysis summary
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]
As with any investment opportunity there is a risk of making losses on investments that Trading Lounge expresses opinions on.
Historical results are no guarantee of future returns. Some investments are inherently riskier than others. At worst, you could lose your entire investment. TradingLounge™ uses a range of technical analysis tools, software and basic fundamental analysis as well as economic forecasts aimed at minimizing the potential for loss.
The advice we provide through our TradingLounge™ websites and our TradingLounge™ Membership has been prepared without considering your objectives, financial situation or needs. Reliance on such advice, information or data is at your own risk. The decision to trade and the method of trading is for you alone to decide. This information is of a general nature only, so you should, before acting upon any of the information or advice provided by us, consider the appropriateness of the advice considering your own objectives, financial situation or needs. Therefore, you should consult your financial advisor or accountant to determine whether trading in securities and derivatives products is appropriate for you considering your financial circumstances.
Recommended Content
Editors’ Picks
EUR/USD retreats to 1.1700 area ahead of FOMC Minutes
EUR/USD stays under modest bearish pressure and trades at around 1.1700 on Wednesday. The Euro weakens against the Greenback as renewed tariff threats from US President Donald Trump unsettle markets. Traders await the FOMC Minutes, which will be released later in the American session.
GBP/USD drops below 1.3600 as markets remain cautious
GBP/USD struggles to find a foothold and trades marginally lower on the day below 1.3600. The cautious market mood, due to the uncertainty surrounding the US trade policy, helps the US Dollar stay resilient against its peers and limits the pair's upside.
Gold slumps below $3,300 on persistent USD strength
Gold continues to stretch lower and trades below $3,300 after losing about 1% on rising US Treasury bond yields on Tuesday. The persistent US Dollar strength weighs on XAU/USD on Wednesday as markets await FOMC Minutes and the outcome of the 10-year US Treasury note auction.
Ethereum security revolution coming? Vitalik Buterin drops bold proposal
Ethereum co-founder Vitalik Buterin has proposed an improvement to the blockchain to boost Ether’s network security. Buterin plans to cap each Ethereum transaction at 16.77 million gas and reduce the risk of attacks on the blockchain. Ethereum could see a boost in its security if there is a lower risk of Denial of Service (DoS attack) and the stability of the chain is improved.
New US tariffs target Asia, but some countries stand to gain
President Trump’s new tariffs are higher than expected for most Asian economies. Moreover, most countries will face additional tariff rates on transshipments. The new announcements are silent on Singapore, India and the Philippines, which might stand to benefit from tariff concessions if negotiations progress favourably.
Best Brokers for EUR/USD Trading
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.