GBPUSD Elliott Wave Analysis: Sterling Hits 1.3 and UK GDP Meets Expectation

9 November 2018 | AtoZMarkets

GBPUSD slumped by more than 100 Pips after a renewed Dollar strength. UK GDP also meets expectation. Will price drop further?

The Pound-Dollar pair dropped after a hawkish Fed meeting gave the Dollar a boost. This was clearly seen even in the Asian session today. While Brexit remains the biggest risk as far as the Sterling is concerned, we can’t put aside the big influence of a strong Dollar. GBPUSD continued yesterday’s bearish run into today’s London session, hitting 1.3 in the process. The UK GDP came as expected and price bounced a bit above 1.3. Will price continue downside?

GBPUSD Elliott Wave Analysis and Important Price Levels

In the last update, we noticed a bullish impulse wave from 1.27 to 1.3175. At the top was a wedge pattern which is a reversal price pattern. When such pattern is seen at the top of trend/Impulse wave or correction, it signals the start of a reversal move or sideways move. From 1.3175, price dropped to 1.3085 and was well contained in this range before the FOMC meeting. Minutes before this event, price rallied to 1.313 making 1.3085 a bearish breakout point. Price eventually broke below 1.3085 and has dropped close to 100 Pips from there.

The drop from 1.3175 is looking more like an impulse wave, though not complete yet. Price is expected to continue downside to test 1.2920 intraday support level. At least a larger 3-wave bearish correction is expected to 1.2850. On the hand, if the drop from 1.3175 ends up corrective above 1.2920, we might see price return upside above 1.3175.

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