GBP/USD: May Reach 1.50 or 1.35 Price Zone In Coming Weeks
Favio Poci | Jun 23, 2016 06:43AM ET
As practice has shown, wave 4 can take several complex structures, such as double and triple 3s and A-B-C-D-E triangles. In GBP/USD, we can observe a complex 3-3-5 corrective pattern taking place.
GBP/USD Daily Chart - June 23, 2016
In this daily chart, we see that GBP/USD broke above 200 Simple Moving Average (green) for the first time since December 2015 but in order for the bullish sentiment to continue, this spike above 200SMA should hold and must not break below 50EMA (blue).
According to Elliott Wave Theory, GBP/USD is completing the last leg of wave 4, wave C. Since March 2016, GBP/USD has created a complex wave 4 structure where wave A has 3 inner waves, wave B has 3 inner waves, and if you go to lower timerframes, wave C is completing 5 moves up (3-3-5 corrective pattern).
GBP/USD 1H Chart - June 23, 2016
In this 1h chart, we observe a divergence in GBP/USD moves towards 1.47, 1.48 and we expect a new high towards 1.49 to complete this euphoric move or wave C of 4.
The divergence is shown between the stochastic and the price action, where last three new highs of GBP/USD has not been supported by stochastic follow-through (see x-notes in chart). A break below 20EMA and 50EMA in the hourly timeframe would suggest two possible scenarios:
- GBP/USD is correcting its 5 moves up - 38% or 50% (1.45-1.44 price zone)
- GBP/USD topped wave 4 and it is starting wave 5
A break below 200SMA in the hourly would indicate the bears are again in control and we will expect GBP/USD to finish wave 5 in the coming weeks that might target 1.38-1.35 price zone.
-------
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.