GBP/USD Price Analysis: Third Elliott Wave might pull back soon

GBP/USD trades 0.35% lower on Monday despite USD weakness against the EUR.
The price waves have moved to a new wave low but there could be a retracement soon.

Rajan Dhall, MSTA FX Daily

GBP/USD 4-hour chart

GBP/USD has been in a downward trend since 10th June making some significant lower highs and lower lows. The price has now moved toward the 76.4% Fibonacci retracement which matched up very nicely with the 138.2% Fibonacci extension.

There is also a bullish divergence on the Relative Strength Index indicator. If you look closely you can see the indicator waves have made a higher low and the price made a lower low wave pattern.

The most important resistance in the Elliott Wave pattern is the wave 1-2 low of 1.2454. If the wave 1-2 low is broken to the upside this would invalidate the pattern and the bulls might regain control of the market.

Interestingly, close to that level the 50% Fibonacci retracement and 50% red Fibonacci singular wave measurement confluence. This means it could be an important zone. This move has moved pretty low pretty fast. There are now some indications that the sell-off could be losing momentum but if the low of 1.2251 breaks then its game on for the bears.

Additional levels

GBP/USD

Overview
Today last price	1.2286
Today Daily Change	-0.0050
Today Daily Change %	-0.41
Today daily open	1.2336

Trends
Daily SMA20	1.2545
Daily SMA50	1.2416
Daily SMA100	1.2484
Daily SMA200	1.2691

Levels
Previous Daily High	1.2437
Previous Daily Low	1.2314
Previous Weekly High	1.2543
Previous Weekly Low	1.2314
Previous Monthly High	1.2601
Previous Monthly Low	1.2076
Daily Fibonacci 38.2%	1.2361
Daily Fibonacci 61.8%	1.239
Daily Pivot Point S1	1.2288
Daily Pivot Point S2	1.224
Daily Pivot Point S3	1.2166
Daily Pivot Point R1	1.241
Daily Pivot Point R2	1.2485
Daily Pivot Point R3	1.2533

Author

Rajan Dhall, MSTA

FX Daily

Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.

EUR/USD trims gains, hovers around 1.1900 post-US data

EUR/USD trades slightly on the back foot around the 1.1900 region in a context dominated by the resurgence of some buying interest around the US Dollar on turnaround Tuesday. Looking at the US docket, Retail Sales disappointed expectations in December, while the ADP 4-Week Average came in at 6.5K.

GBP/USD comes under pressure near 1.3680

The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.

Gold loses some traction, still above $5,000

Gold faces some selling pressure on Tuesday, surrendering part of its recent two-day advance although managing to keep the trade above the $5,000 mark per troy ounce. The daily pullback in the precious metal comes in response to the modest rebound in the US Dollar, while declining US Treasury yields across the curve seem to limit the downside.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.