GBPUSD hit 2-weeks high after starting the week with a bullish gap amid Brexit optimism. The price has now broken out of a 2-weeks corrective channel.
November 11, 2019 | AtoZ Markets – The British Pound resumed the October bullish run after a two weeks retreat. The Brexit remains the major driver and investors seem to be cautious of their moves. Between October 21 and November 10, the British Pound had a corrective dip. The quick rally on November 11 meant that the bulls are not relenting. Eventually, before the end of the last trading week, the pair broke above the important 1.29 level before advancing further out of the 2-weeks corrective channel.
GBPUSD hits 2-weeks high – Brexit remains major driver
The market is quite optimistic of the Conservatives winning the next British election. This will give Brexit a big advantage. Over the weekend, the UK election polling showed that the conservatives are increasing their lead over the Labour. Brexit remains the major driver of this pair. Therefore, positive Brexit headlines will drive the price further upside toward the 1.3 psychological level. Furthermore, the bullish trend can be quickened by the US-China trade deal optimism. Positive trade headlines will reduce the money flow into the USD as risk appetite increases. There is barely any high-impact fundamental news on the economic calendar today. The market will, therefore, turn its focus on the FOMC minutes on Wednesday.
GBPUSD Elliott wave analysis
Technically, GBPUSD should advance above 1.3. The break above 1.29 confirmed the resumption of the bullish trend from 1.277. In the last update, we used the chart below (All charts used are from TradingView)
We started a bullish impulse wave from 1.196 when it was clear that the 1.196-to-1.3017 rally was not corrective. The dip that followed to 1.277 was corrective and we labelled it as wave (iv) of an impulse wave instead. Ideally, wave (v) could turn out extended and thus shoot to 1.4 especially if the Conservatives finally win the coming general election. On the short-term, we should expect bullish targets at 1.317 and 1.342. The new chart below shows that the price has breached 1.29.
The GBPUSD price has broken above the wave (iv) channel and we can say wave (v) has started from 1.277. The next barrier will be the 1.3017 resistance level. If the price advances above 1.3, the bullish trend should continue to the target levels mentioned above. However, if a fast decline happens below 1.27, this scenario becomes invalid.