The Pound Sterling hits its highest price in the last 19 months following Boris Johnson’s massive triumph at the UK polls. The following includes the GBPUSD Elliott wave analysis.
December 13, 2019 | AtoZ Markets – GBP pairs had a massive Thursday just before the Asian session kicked in. The results of the UK polls saw the Tories already securing over 350 seats. The projected landslide victory was becoming evident. GBPUSD quickly spiked above 1.34 to hit 1.3515, its highest in the last 19 months. The Conservatives’ win has driven a renewed optimism for Brexit. All the balls are now in PM Johnson’s court as regards Brexit. Meanwhile, after dropping a bit during the Asian session, GBPUSD and other GBP are currently retreating. GBPUSD dropped to 1.336 before returning slightly above 1.34 as strong buyers book profits.
Tories win a landslide victory
After having the election won by a huge majority, Mr Boris will now focus on how and when to get Brexit done finally. On December 19, the tories will announce their legislative programme which will include the Withdrawal agreement bill to validate PM Johnson’s deal with Brussels before the January 31 exit deadline. With the majority win, this would be made to work out quickly even if it involves spending more days after Christmas. PM Boris vowed to get all the details ready before December 31. This should happen without delays or further extension.
With the UK elections done, the general Forex market will now focus on the US-China tariff deadlines on December 15. President Trump, in a series of Tweets, was upbeat that phase one of the deal is 90% done. The deal is taking a clear shape which will boost the market mood and lift investors’ appetites.
GBPUSD Elliott wave analysis
From a technical perspective, GBPUSD is in a bullish trend from 1.196. In the previous updates, we looked at an emerging impulse wave pattern. We expected the 5th wave to be extended with eyes on 1.342 and 1.382. In the last update, we used the chart below (Charting tools from TradingView).
The price was making a diagonal pattern at the 1.317 Fibonacci level. We then expected a dip to 1.31 as we counted an impulse wave from 1.2757 (where the 4th wave ended) for the 5th wave of the impulse wave pattern from 1.196. The new chart below shows price moving exactly as we expected.
A dip to 1.31 was quickly followed by a massive surge above the 1.342 target level to end wave iii of the 5th wave. The price is now retreating to 1.342 and might go deeper to 1.325-1.33 to complete wave iv. Wave v should then emerge toward 1.382.