GBP/USD Elliott Wave Analysis
By actionforex
GBP/USD – 1.6052
GBP/USD – Wave (v) of C possibly ended at 1.6879 as a failure 5th
Although the British pound dropped to as low as 1.5923 last week, the recovery from there suggests initial consolidation would be seen this week and minor correction to 1.6110 is likely, however, renewed selling interest should emerge around 1.6228 (38.2% Fibonacci retracement of 1.6722 to 1.5923) and bring another decline later.
Our preferred count on the daily chart is that the major decline from 2.1162 top (9 Nov, 2007) is a 5-waver with wave 1: 1.9337, 2: 2.0399, extended wave 3 has ended at 1.3500 and wave 4 is unfolding with A: 1.4986, B: 1.3655 and impulsive wave C is sub-divided into (i): 1.5068, (ii): 1.4398, (iii): 1.7044 (instead of 1.6745), (iv): 1.5708 and wave (v) has either ended at 1.6879 as a failed 5th or may extend one more rise but upside should be limited to 1.7403 (50% projection of wave (i)-(iii) measuring from wave (iv)) and this wave C as well as wave 4 should hold well below 1.7802 (61.8% projection). Only a breach below support at 1.5708 (previous forth of a lesser degree) would confirm wave 4 has indeed ended.
On the downside, below 1.5923 would extend decline from 1.6879 to 1.5800, however, reckon support at 1.5708 (wave iv trough) would hold on first testing.
On the upside, above 1.6323 (50% Fibonacci retracement of 1.6722 to 1.5923) would dampen this bearish view and suggest the first leg of decline from 1.6879 has possibly ended, then stronger rebound to resistance at 1.6412.
Longer term – Cable’s rise from 1.0520 (Feb 1985) to 2.0100 (September 1992) is seen as [A], the decline to 1.3682 is labeled as (B) and (C) wave rally has ended at 2.1162 (9 Nov, 2007) which is also the top of larger degree wave B with circle. The selloff from there is a 5-waver and break of support at 1.3500 (23 Jan 2009) would extend to 1.3300 but price should stay well above psychological support level at 1.3000.
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