3 July GBP USD Elliott wave analysis: 500 Pips trade idea

Cable broke upside last week after after a corrective dip. It does look like the long term bullish corrective recovery since 2016 after the BREXIT impact will continue. Technical buyers have already taken advantage of the recent rally. Is price far-fetched or a pullback will happen for late and cautious buyers?. The following discusses a 'buying the dip' idea based on 3 July GBP USD Elliott wave analysis.

03 JulyAtoZForex - When it comes to trading strategies especially with technical analysis, there are different traders with different entry methods. Some prefer entries when price reverses at an important zone without waiting for a significant breakout. Some wait for breakout while others wait for retracement after a breakout. There is nothing wrong in any of these. The first method ensures the best R/R and being able to execute and exit the trade faster than others but with more 'false' signals. Waiting for breakout reduces the amount of 'false' signals and enables better loss management but lower R/R than the first method. Waiting for retracement has a good R/R, with lower false signals than the other two but sometimes, price may never retrace to the preferred level leading to a missed trade. A trader needs to choose his 'cake' and 'poison' with an absolute consistency. Going back to GBPUSD, the first two set of strategists already book an entry. How about the the third?. The chart below was used in the last update.

29 June GBP USD Elliott wave analysis GBPUSD Elliott wave analysis, H6 (click to zoom)

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At the end of the correction downside, the first method was triggered by a reversal method like divergence (or any other method that signals reversal) thereby giving an early entry and a better R/R. The second method triggered by the first full breakout. The third method needs to wait for price to retrace since price has shown its readiness to resume upside. The chart below shows our updated count - changing from an impulsive wave upside to a double zigzag correction.

3 July GBP USD Elliott wave analysis: buy the dip?

3 July GBP USD Elliott wave analysis GBPUSD Elliott wave analysis, H2 (click to zoom)

A rally to 1.33-1.34 is very likely but price may make a correction before the rally continues. Waiting for 50% retracement to join the buyers is not a bad idea with stop loss at few pips below 1.2582. This will also ensure a  good R/R like the first method.

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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