GBPUSD is dropping today today after a bullish dollar. Will it drop further? The following 26 July GBPUSD Elliott wave analysis looks at what could happen next.
We have used two technical tools to decide the near-term direction of the Cable for the past couple of weeks and the accuracy is outstanding. Elliott wave theory and harmonic patterns. While Elliott wave theory tells the bigger direction, harmonic pattern also helps to spot price reversal zones within a range of move. Let’s look at the last two forecasts. On 18 July, we spotted an emerging expanding diagonal Elliott wave pattern which was expected to cause a rally at 1.295. Price did exactly as expected, got to 1.2955 and rallied up to 240 pips. While that was going, we spotted the rally might be halted by an emerging Gartley harmonic pattern in the 24th July update. We had the chart below for that update.
In summary, a Gartley pattern could complete at 1.3202-1.3210 price zone.
Price dropped exactly from the Gartley reversal zone and dipped more than 90 Pips and might get to 160 Pips at 1.3054. From 1.2955, we have started counting a new wave upside. The diagonal was expected to end a much larger impulse wave which should be followed by at least a 3-wave bullish correction. Wave (a) might have ended where the Gartley ended. The current drop might be wave (b) which is expected to end around 1.3054. At the end of the current dip, a new bullish move is very much likely to happen upside. We will talk more about this in the next update. Stay tuned.
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