FX.co ★ GBP/USD Wave Analysis for December 07, 2012

GBP/USD Elliott Wave

For the last few days the GBP/USD pair was trading in a downward movement, corrective A wave (coloured blue) of the bigger (2) wave (coloured green) was developing. Yesterday during the Asian session we could observe ascending movement toward the 1.6127 level and we can consider this move as the end of the (2) wave (coloured pink). Therefore, during the European and New York sessions this major pair did not manage to hold this level and the price started pushing lower reaching a new 3 days low at 1.6035 level. We can consider this move as the end of the impulsive (3) wave (coloured pink). At the moment the GBP/USD pair is trading around 1.6045 level and we are expecting to see the price higher when development of the B wave starts. In accordance with our wave rules and taking into account that the wave B should retrace 61.8% of the wave A, we can define the potential targets with measuring wave A , with take profit at 1.6090 (61.8% of wave A). To reduce the risk, we can use support at 1.6000 level as stop loss.

Support and Resistance

(S3) 1.5928 (S2) 1.5983 (S1) 1.6017 (PP) 1.6072 (R1) 1.6106 (R2) 1.6161 (R3) 1.6195

Trading Forecast

Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1.6030 with stop loss 1.6000 and take profit at 1.6090 are recommended.