Elliott Wave Weekly

GBP/USD Elliott Wave Analysis

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GBP/USD – 1.2932

 
Although sterling found support at 1.2852 last week and has risen again to as high as 1.2996, the subsequent retreat suggests a week of consolidation would take place and risk of initial weakness to 1.2900 cannot be ruled out, however, reckon said support at 1.2852 would hold and bring another rise later, above 1.2996-00 level would signal the corrective rise from 1.2774 (exactly 38.2% Fibonacci retracement of 1.1986-1.3269) is still in progress for retracement of the decline from 1.3269 top, then gain to 1.3020-25 (50% Fibonacci retracement of 1.3269-1.2774) and possibly towards 1.3080 (61.8% Fibonacci retracement) is likely, having said that, price should falter below 1.3165, bring another decline in late Q3. 


Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has possibly ended at 1.7192, below support at 1.4232 would add credence to this count, then further fall to 1.4000 level would follow but reckon downside would be limited to 1.3655 support and price should stay above previous support at 1.3500.


On the downside, whilst initial pullback to 1.2900 cannot be ruled out, reckon 1.2852 support would hold and bring another rebound. A daily close below 1.2852 would suggest the rebound from 1.2774 has ended, bring weakness to 1.2810-20 but break of said support at 1.2774 is needed to confirm the decline from 1.3269 top has resumed for retracement of early upmove to 1.2700 and later towards 1.2620-30 (50% Fibonacci retracement), however, price should stay well above previous chart support at 1.2589, bring rebound later.

Recommendation: Stand aside for this week.



Longer term - Cable's rise from 1.0520 (Feb 1985) to 2.0100 (September 1992) is seen as [A], the decline to 1.3682 is labeled as (B) and (C) wave rally has ended at 2.1162 (9 Nov, 2007) which is also the top of larger degree wave B with circle. The selloff from there is a 5-waver with wave (A) ended at 1.3500 (23 Jan 2009), wave (B) itself is labeled as A: 1.6733, triangle wave B: 1.4813 and wave C as well as top of wave (B) ended at 1.7192 (2014), hence the selloff from there is an impulsive wave (C) with wave I : 1.4566, wave II 1.5930, an extended wave III is unfolding and already exceeded our downside target at 1.3500 and 1.3000, hence weakness to 1.2500 and possibly 1.2000 cannot be ruled out, however, price should stay well above psychological level at 1.0000.