Short Term Trend

Published 6th November 2017 & amended 5th December 2017

The GBPUSD has been challenging short term. Wave structure developed into a complex pattern and even the subwaves have been partially complex. We forecast another impulsive push to the upside until we can finally call the correction as completed. There is even a slight possibility that what we’ve labeled as (d) was the final push and the sterling is headed down lower already as we publish this.

With or without a new high, the cable is likely to head steep south. The first confirmation target for a new trend down is around the 1.28 figure.

The steep character of wave 3° should reappear as wave (5) progresses. We have witnessed the sharp drops of wave 3° in the past years and would expect to see something similar if the wave carries on.

Our 2018 GBPUSD forecast is close to parity.

Medium Term Trend

Published 6th November 2017 & amended 14th December 2017

Medium term the cable is working on a 4th wave of intermediate degree before continuing  its long term trend to the downside. So far we have a textbook elliott wave development in the medium term. Wave (4) alternates to wave (2). It is deep in terms of fibonacci retracement and shows a complex pattern.

We should progress further to the downside in the following years as primary waves 3° and cycle waves V finish. As of November 2017 we count 7 waves down from the 2014 top. That’s an incomplete elliott wave pattern. It calls for followthrough to the downside. Our GBPUSD forecast is below the levels the cable saw in the 80s.

Long Term Trend GBPUSD Forecast

Published 6th November 2017 & amended 14th December 2017

Long term we anticipate a drop of the cable below its level in the 80’s. Wave IV showed a 3-wave structure after 22 years. Moreover the subsequent drop looks impulsive.

Fundamentally it has proven more often wrong to isolate rather than open up. The long-run downward trend of the former superpower looks not finished. The next years should bring further downside to the sterling vs. the dollar.


Technical Analysis