FX.co ★ GBP/USD weekly wave analysis

GBP/USD Elliott Wave
For the past few weeks the GBP/USD pair is trading upwards, in Elliott perspective this move represent corrective wave 2 (coloured blue) of the bigger wave (C) (coloured red). Yesterday, during the Asian and European session we could observe strong ascending movement from 1.5527 towards the 1.5590 level. Therefore, during the early New York session this major pair has continued trading in a bullish mood and price reached a new high at 1.5600. If price go below 1.5500 area today i would like to consider yesterday's high as the end of the corrective wave 2 (coloured blue) and than we can expect to see big downwards move. In accordance with our wave rules and taking into account that wave 3 should retrace 161.8% of wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.3433 (161.8% of wave 1). To reduce the risk, we can use invalidation point at 1.5800 level as stop loss.

Support and resistance
(S3) 1.5438 (S2) 1.5482 (S1) 1.5518 (PP) 1.5562 (R1) 1.5598 (R2) 1.5642 (R3) 1.5678

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downwards movement. That is why short positions at level 1.5500 with stop loss at 1.5800 and take profit at 1.3433 are recommended.