29 June GBPUSD Elliott wave analysis

Has GBPUSD completed an important wave pattern? Will price rally strongly in the coming days? The following 29 June GBPUSD Elliott wave analysis looks at GBPUSD technical analysis based on Elliott wave theory.

It seems GBPUSD will rally in the coming days after an important wave pattern completed. The cable has been falling following a very strong Dollar. The decline has emerged into an impulse wave. At the end of an impulse wave, a correction in the opposite direction is often seen. The 5th wave of this impulse wave has completed an ending diagonal pattern which makes more case for the potential rally. When the 5th wave of an impulse wave ends up as a diagonal, a strong move in the opposite direction is often seen. We have seen glimpses of this rally but the big one could be around the corner especially if there is a significant bullish breakout of the diagonal. In the last update, the chart below was used.

The 30 Min chart of GBPUSD above shows price completing wave (x) of a probable double zigzag pattern. Wave (x) also ended with a double zigzag. If price rallies to break above the channel, we should expect more rallies to 1.36. Conversely, if price drops below 1.33, we might see it at 1.32 and probably below which would mean that the correction has already ended with a simple zigzag at 1.347.

There was a breakout upside but was not sustained as price dipped strongly below 1.32. The 5th wave has now re-emerged into a very familiar pattern. The chart below shows the new update.

29 June GBPUSD Elliott wave analysis: what next?

A diagonal 5th? Yes, that’s what could happen. A breakout above the wave (ii)-(iv) connecting trendline is important, to confirm the bullish recovery. Price may advance to 1.38 after the breakout. A 3-wave bullish correction is expected and this means that the larger trend is still bearish. Price should return downside once the correction is over. If there is no breakout or price moves sideways instead, there is bigger chance the diagonal would be violated and price drop below 1.304. Stay tuned for the next update.

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