8 November 2018 | AtoZMarkets
GBPUSD completed an impulse wave at 1.3175 and has dropped more than 50 Pips to stabilize around 1.31. The market awaits today's Fed fund meeting.
Amid Brexit deal concerns and the aftermath of the US mid-term elections mid-week, the Cable advanced to 1.3175. By this move, Sterling has completed an impulse wave and price is expected to start a 3-wave bearish correction. Before the end of yesterday, price had already dropped 50 Pips. The decline continued today and price now stays around 1.31 handle. Brexit talks have been a bit silent while the market awaits today's FOMC Fed decision. The dollar has become stronger ahead of FOMC. With an expanded economy and rising wages, the FOMC is expected to keep rate at 2.25%. The next 0.25% increase is expected in December in their next meeting.
GBPUSD Elliott Wave Analysis and Important Price Levels
In the last update, price was expected to rally to 1.31-1.3150 to complete a bullish impulse wave. After completing an impulse wave rally from late October at 1.27, the Cable might just drop back to 1.3 from the current 1.31 price level. It appears that price might drop back to 1.292 intraday level in a 3-wave bearish correction at least. The chart below shows the new Elliott wave forecast ahead of Fed meeting.
The impulse wave is expected to have ended at 1.3175. A wedge pattern at 1.3175 shows price might drop below to retest 1.292 support. Above 1.3175, there is a strong and untested resistance zone at 1.3255 - 1.3290. If price breaks below 1.3085, it will most likely drop further to 1.292 or even below. If the expected price drop happens and looks corrective, we should expect further rallies toward the 1.3255-1.3290 resistance zone. On the other hand, if price remains in a sideways move (shown with a red triangle), a break above 1.3175 will definitely continue the bullish run to 1.3255-1.3290 zone.
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