GBPUSD spiked upside toward 1.29 as Fed Chair testifies before the House Budget Committee. The following also includes the GBPUSD Elliott wave analysis November 14 update.
November 14, 2019 | AtoZ Markets – After staying in a 50-pips range since Tuesday, GBPUSD is making a big effort to test or even break above the 1.29 handle. The resurgence started on Monday when some positive Brexit news hit the market. The price had a sharp 100-pips rally from 1.28 afterwards. However, a fast decline followed to 1.2815 and the price has stayed within the two extremes ever since. Will the current surge finally lead to a break above the 1.29 top?
Geopolitical highlights have dominated the markets this week. The US-China trade deal and the Brexit general election are the two major risk concerns for traders. Meanwhile, the Fed Chair Powell started a 2-day testimony about the US economy before the US legislature. On Wednesday, in a 90-minutes session before the Joint Economic Committee, he said the economy is fairly good and there would be no need to cut down the interest rates anytime this year. The session continues today before the House Budget Committee. However, the greenback is losing against the major currencies today which include about 0.45% decline against the Sterling.
GBPUSD Elliott wave analysis November 14 update
Technically, GBPUSD completed a 3-weeks corrective move at 1.277 from 1.3015. The bullish move from 1.196 is now impulsive rather than a corrective move. It now looks very much likely that the Cable will advance to 1.32 or higher. The chart below shows the Elliott wave analysis from 1.196 (All the charts below are from Tradingview)
A clear bullish impulse wave is advancing from 1.196 as the GBPUSD Elliott wave analysis November 14 chart above shows. Wave (iii)-(iv) ended at 1.3015 and 1.277 respectively. The current surge is expected to be the 5th wave. Meanwhile, the 3rd wave is shorter than usual. This could mean that this rally might go much higher due to the possibility of an extended wave (iii) or (v). We should, however, take it gradually. The next bullish targets are 1.317 and 1.342 which are the 38.2% and 61.8% Fibonacci extension of wave (i)-to-(iii) from (iv). In the last update, we looked at the sub-waves of wave (iv) with the chart below.
A double zigzag pattern ended at 1.277. We expected a sharp dip and then a break above the sub-wave 1 (circled). That is playing out exactly like the first chart shows. The chart below takes a clearer look from a lower time frame.
Speculative buyers may get an entry above 1.29 and if this wave count is correct, we should see a micro impulse wave rally from 1.277 to 1.32-1.33 ideally. However, this scenario will become invalid if a sharp dip follows below 1.2815.