GBPUSD recovers to 1.29 as the week started with a resurgence. A bullish triangle completed at 1.2825. However, the price is still a distance away from breaking out.
November 26, 2019 | AtoZ Markets – The Cable ended last week with a dip to 1.2825. However, this week started with a minor resurgence to ensure the currency pair remains range-bound between 1.3017 and 1.2765. With the current bounce to 1.29, the price was almost at the mid-point between a bullish breakout and the continuation of the bearish correction. After peaking at 1.2912 on Monday, the market is now retreating to 1.288. However, unless it breaks below 1.2825, the bulls could push for a breakout toward 1.3 this week. Traders continue to pay attention to the British upcoming election and the US-China trade talks to weigh the risk involved in this volatile pair.
GBPUSD recovers to 1.29. Latest updates on Brexit and US-China talks
Prime Minister Boris launched the Conservative manifesto on Monday, promised to get Brexit done and ‘forge a new Britain’. He emphasized on the need to exit EU quickly to respect the wish of the people and to start solving other challenges the country is facing. He, therefore, vowed not to extend the transition period beyond 2020. GBPUSD recovers to 1.29 as a result. Meanwhile, the US and China trade negotiators reportedly held a phone call earlier today. It was perceived to have gone well. The two parties have shown optimism in recent time and a deal is now looking more likely. Ahead today, the US consumer confidence data will be released. The impact is expected to be small unless there is a large deviation from the market consensus.
GBPUSD Elliott wave analysis: a triangle wave (iv)?
Technically, the GBPUSD bullish trend is still intact. The current rally started at 1.196 and the emerging pattern is an impulse wave. The 3rd wave ended at 1.3017 while the current dip is completing the 4th wave which looks like a triangle pattern. In the last update, we used the chart below (All the charting tools below are from TradingView).
As the chart above shows, we identified wave (iv) as a triangle pattern. We also expected the impulse wave channel to offer support around 1.281. Eventually, the GBPUSD price dropped a bit below 1.284 but remained above 1.276 before bursting upside.
Swing and short-term buyers may look for entry above 1.2913 as the price could break far above 1.3 to complete wave (v). On the other hand, if the current dip continues below 1.2825, there is a high likelihood that the triangle wave (iv) would be invalidated below 1.276. However, if the price drops to 1.2751, buyers may still get a bullish opportunity as wave (iv) completes a double zigzag pattern.