Pound Sterling is poised to continue the recovery above 1.3 if the critical support zone is not breached. The following GBPUSD Elliott wave analysis October 29 update looks at what could happen next.
October 29, 2019 | AtoZ Markets – The Cable retreated from 1.3 following a massive surge in October. October 2019 was always going to be a critical month for GBP pairs. The Brexit talks resumed and an agreement was struck but the parliaments have altered the flow. GBPUSD gradually dropped from 1.3 to 1.28 from last week. Since Thursday, the price has gone sideways, oscillating between 1.288 and 1.28. Currently, there has been an effort to break above 1.288 but the bullish momentum is not big enough. The Cable currently lies just above a major intraday support level. If there is a breakdown below it, the bearish run from 1.3 should continue to 1.26 or below. On the other hand, if a good break above 1.288 happens, we might see the price resume the bullish run above 1.3.
The UK parliament started voting on Monday to decide whether PM Boris will go ahead to hold a snap general election or not. ‘No deal’ Brexit is already off the table so the market might react mildly to the outcome of the election which will continue today. Apart from the parliamentary election, the market will also have Wednesday’s FOMC and Friday’s US employment data to focus on.
GBPUSD Elliott wave analysis October 29 update
From the Elliott wave perspective, the rally from 1.196 to 1.3 looks corrective. If that is the case, GBPUSD should decline further to continue the long term bearish trend. However, the slowness of the dip from 1.3 is giving the bulls an opportunity to get back in. In the last update, we used the chart below.
There were two scenarios. However, the price has not decided yet which direction to commit to. Whether to resume the bullish run from 1.196 or to continue the long term bearish trend toward 1.22, the price will have to break away from this region of uncertainty.
The new chart above shows the GBPUSD Elliott wave analysis October 29 update. The dip has stretched a bit but still remains above the minor support zone. If the price drops below the zone, we take the rally from 1.196 to have completed a corrective zigzag pattern at 1.3. On the other hand, if the dip from 1.3 remains above the zone and breaks above the corrective channel, there is a high chance that the bullish move will continue above 1.3.