FX.co ★ GBP/USD Wave Analysis for December 10, 2012

GBP/USD Elliott Wave
Last week the GBP/USD pair was trading in a downward move, corrective A wave (coloured blue) of the bigger wave (2) (coloured green) was developing. During the Friday's Asian and European sessions we could observe strong descending movement from 1.6060 towards the 1.6000 level and we can consider this move as the end of the 5 impulsive (coloured pink) of the bigger A wave (coloured blue). Therefore, during the early New York session after development of the corrective B wave (coloured blue) started, the GBP/USD pair started pushing higher reaching a new session’s high at 1.6042 level. At the moment this major pair is trading around 1.6040 level and we are expecting to see the price higher today. 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 1.6081 (61.8% of wave A). To reduce the risk, we can use support at 1.6020 level as stop loss.

Support and Resistance
(S3) 1.5944 (S2) 1.5972 (S1) 1.6004 (PP) 1.6032 (R1) 1.6064 (R2) 1.6092 (R3) 1.6124

Trading Forecast
Proceeding from Elliott Wave rules today, the price is expected to begin the upward movement. That is why long positions at level 1.6045 with stop loss 1.6020 and take profit at 1.6080 are recommended.