GBPUSD has been bearish this week. How long will price last downside before a bullish resurgence? The following 12 July GBPUSD Elliott wave analysis gives useful insights.
Following the breaking news of the resignation of UK Brexit minister David Davis, price dropped fast to lose some of last week gains. The Cable, from Elliott wave theory perspective, is expected to rally up to 1.36 or higher after an impulse wave completed with a diagonal 5th leg. The yesterday rallying dollar was seen across all the majors though the effect was minimum on GBPUSD. With the talks of Brexit still ongoing, the Cable might continue upside once the current bearish correction ends. We expected the bearish correction, though it happened earlier than we thought. In the last update, the chart below was used.
GBPUSD is advancing toward 1.3475 which would be the first bullish target before we see a 3-wave dip. The rally could continue to 1.37-1.38 to complete probably a zigzag pattern. A break below 1.3215 wave 1 (circled) high would be the first signal of invalidity. If price stays above 1.3215, we should see further rally to 1.3475 today or tomorrow if the bullish momentum persists.
The rally was expected toward 1.3475 before a bearish move. The chart below shows the new update.
12 July GBPUSD Elliott wave analysis: what next?
The chart above shows wave a (circled) has completed and price is making a 3-wave dip. The dip could continue to 1.31 before the bulls take over. The bullish target is now at 1.36-1.37. This forecast will be invalid if the dip goes further below 1.3050. In as much as price stays above 1.3050, there is a big likelihood that the bullish move would take over again. Stay tuned for the next update.
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