The Cable had a successful bullish breakout after completing a correction downside. What should we expect next?. Will the bullish momentum increase or the bears recover?. The following give clues based on 14 July GBPUSD Elliott wave analysis.
14 July, AtoZForex – We discussed about 50-61.8% Fib-ratios in the last update. We stated that more than an average correction completes at this level. When we understand the corrective pattern that ends at this level, it even makes more sense and build a strong case for us. In the last update, there was a simple zigzag. Don’t forget that we projected this correction at the top, in a previous update, before it even happened. We even called for where to expect the correction to end. All worked well like we knew they would. The breakout buyers should be in some profit now. Is there a chance that price will correct for new buyers to join?. We will discuss this soon.
Let’s review the last update as we always do. The chart below was used. It showed a strong breakout rally that happened late June. Don’t forget we also called for this in a Mid-June update. We have been almost perfect in the recent intraday forecast of the Cable though we can’t be this perfect all the time.
The pattern as explained above was a double zigzag. It has not not stop being a corrective structure. We speculated a dip to 1.275-1.28 and gave the price level where the bears can take total control (below 1.258)
14 July GBPUSD Elliott wave analysis: what next?
The breakout was to confirm price commitment to our course. It really does look perfect as price resumed upside just after hitting the top of the reversal region. What else should we expect after this? The chart below gives an answer.
The breakout shown above is a rally of a lower degree. The same rule will apply – 50-61.8% retracement. Price could correct to 1.289 before continuing upside. A break below 1.28 will invalidate this setup. The ultimate target still remains 1.33-1.34.
Do you have other views in contrast to the ones listed or you want to compliment them further? Let me know by your comment below.
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