Pound Sterling had its biggest hourly move since October 24. The following GBPUSD Elliott wave analysis November 11 update looks at what could happen next.
November 11, 2019 | AtoZ Markets – GBPUSD rose to 1.289 just before the opening of the New York trading session on Monday. The UK GDP came out a bit below expectation. The market, however, was quiet as the Brexit headlines remain the major risk concern for investors and traders. GBP surged quickly after the Brexit Party’s Nigel Farage suggested that the party’s candidates will stand down for the Conservative’s. This is a positive one for Brexit and PM Boris will be relieved. The price could ascend to the 1.3 critical level and even break above it. Until the elections in December, Pound Sterling will continue to respond to volatile Brexit headlines.
Why did the Cable surge?
Ahead of the December general elections, there were fears that Nigel Farage’s Brexit party might take crucial votes from the Conservative candidates. According to reports, Boris Johnson’s Brexit victory will depend largely on whether these two work together or not. The two parties are pro-Brexit. If they can work together, they would gain an extra 90 seats for Brexit. Meanwhile, Nigel Farage has now given Brexit the needed boost. He stated that the party will stand down and will not contest 317 seats that Conservatives won at the last parliamentary elections. The statement is pro-Brexit and therefore supported a GBP rally.
GBPUSD Elliott wave analysis November 11 update
Technically, the dip from 1.3 looks corrective. After the October surge from 1.22 completed a larger corrective pattern, the dip that followed did not justify a reversal. Rather, it suggested the bullish trend will most likely continue above 1.13 to the 1.318 and 1.3385 resistance levels. In the last update, we looked at two scenarios. With the current market condition, the scenario below is looking more likely (All charts below are from TradingView)
We expected a dip to 1.275-1.27 before a big surge above 1.286. The dip that followed afterwards was a bit short of the reversal zone before the price burst upside. The new chart below suggests GBPUSD will continue upside if it breaks above the channel.
The bearish correction has probably ended at 1.277. The current surge could find a minor resistance at the roof of the channel. New buyers might join at the first breakout or wait for a dip and then get in at the break above the wave 1 (circled). If the positivity around Brexit persists, we should see the breakout continue toward 1.33.