Cable

Short-Term GBPUSD Elliott Wave Analysis

Published 17th July 2018 & amended 12th August 2018 

We see a textbook impulse within the GBPUSD Elliott wave structure. It occurred from the April 2018 top to the end of May 2018. Wave action since early-June does not fit to the character of the previous drop. It is most likely a complex sideways correction, which we interpret as minute wave ii(circle). All of this action occurred within the darker grey trend channel to the downside. We label the last breakout attempt of the trend channel as the very end of minute wave ii(circle). It is decomposed as a zig-zag / zig-zag / triangle double-three combination. Weakness during the month of August is most likely the resolution of that correction already.

We expect to see a third wave to the downside in the cable during the next few weeks. Strenght should pick up and manifest within momentum indicators. Moreover, the darker grey trend channel should not penetrate the upside significantly during the third wave. Both typical third wave characteristics should be visible or we are most likely wrong in our wave interpretation.

The ongoing Brexit related newsflow continues to provide fertile soil for GBP/xxx related narratives that could trigger significant price moves.

Medium Term GBPUSD Elliott Wave Analysis

Published 13th April 2018

On the medium-term timeframe, the GBP/USD is close to completing or has already completed a 4th wave. It is either of primary or of intermediate degree. The bounce since the 2016 low shows a deep retracement and makes a primary degree diagonal more likely. An intermediate degree 4th wave is possible but lower odds.

We expect continuation along the long-term trend to the downside. Primary wave 5(circle) and cycle wave V still need completion. As of today, 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. It reflects a continuation of its Supercycle trend.

Long-Term Trend GBPUSD Elliott Wave Analysis

Published 6th November 2017 & amended 14th April 2018

The GBP/USD has decreased almost tenfold over the past couple of decades. It reflects the shift of superpowers. The USA has taken over the leading role from Great Britain over this timeframe. This is valid in an economic and also geopolitical sense.

Going forward, we anticipate the Supercycle trend to persist. A drop of the cable below its levels in the 80’s is likely. Cycle wave IV shows a simple 3-wave structure, which took a total of 22 years. Moreover, the subsequent drop looks impulsive. Especially the simple 3-wave move is important for our case here. It got confirmed as price action went below its b-wave low.

Is it possible that we have seen the low in the 80’s already? This is unlikely. The cable needs to develop a leading diagonal from that bottom. Moreover, the bounce from the 2016 bottom counts as a zig-zag or zig-zag combination as well. Leading diagonals at multiple degrees are possible but very rare.

 

Technical Analysis