GBPUSD continues the bullish run toward 1.3475 after last week key events. The following 9 July GBPUSD Elliott wave analysis looks at what could happen next based on Elliott wave theory.
On Friday, the British cabinet finally decided what it wants from BREXIT according to analysts at Rabobank. Before Friday, price already completed an important wave pattern. Immediately price completed this wave pattern, it rallied strongly and has continued to advance days after. The BREXIT might not be the reason for the rally, price is just moving just as it should. Will price rally further?
In the past updates, we have been looking at an impulse wave with a diagonal 5th. This wave pattern is a very strong reversal pattern. More than 70% of the time, price would make a big move in the other direction. The Cable will much likely rally to 1.38 in the coming days to complete the bullish correction. The chart below was used in the last update.
Price has broken out of the diagonal 5th wave. The rally is expected to continue as we count a bullish impulse wave (a) (Circled in red) which is the first leg of the major correction since April. This forecast will hold unless price moves fast and break below 1.3090 which will most likely lead to a break below 1.3050 support level. The three fundamental events will most likely lead to a strong move and we’ll see they add to or subtract from our forecast.
9 July GBPUSD Elliott wave analysis: what next?
GBPUSD is advancing toward 1.3475 which would be the first bullish target before we see a 3-wave dip. The rally could continue to 1.37-1.38 to complete probably a zigzag pattern. A break below 1.3215 wave 1 (circled) high would be the first signal of invalidity. If price stays above 1.3215, we should see further rally to 1.3475 today or tomorrow if the bullish momentum persists. Stay tuned for the next update.
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