20 July GBPUSD Elliott wave analysis

GBPUSD has completed an Elliott wave pattern that suggests price would rally in the coming days. The following 20 July GBPUSD Elliott wave analysis below discusses more about this.

The Cable completed an expanding diagonal pattern as the last leg of a large bearish impulse wave. We discussed about this pattern in the last update when price was still short of the reversal level. If this pattern would hold, we should see GBPUSD getting stronger in the coming days. At least, a 3-wave bullish correction would be expected up to 1.36. How likely is this? Let’s review the last update where we used the chart below.

The chart above shows the possibility of price completing an expanding diagonal pattern. This is as viable as the normal diagonal pattern. Price could be supported at 1.2950 and bounce upside at the end of this pattern. A strong rally to 1.3365 and 1.3477 will be seen once price breaks above it. The minimum should be a rally to 1.31-1.32. Conversely, if price drops swiftly below 1.2950, the bullish expectation would be invalidated.

20 July GBPUSD Elliott wave analysis: what next?

Price is now at the base of the diagonal which could act as a support before price reverses. A bridge above 1.309 should be the first signal of a bullish move. A proper break above the wave (iv)-(v) channel would be a more assured bullish signal. Price is expected to rally above 1.3365 up to 1.36 if it agrees with this forecast. A fast dip below 1.295 up to 1.29 would invalidate this forecast. Stay tuned for the next update.

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