Turning up the pound

March 14, 2016 12:02 PM

GBP/USD has turned up in the last few weeks with very sharp price action  which we see it as wave IV within big impulsive downtrend.

Fourth waves will typically retrace back to the area of a former wave four, and also for around 38.2% compared to wave three. Well, we can see that around that area there is also a swing low of 1.4565 since 2015 that can also turn into a resistance. If we put all in once context then 1.4500-1.4600 can be very interesting new reversal zone, so be aware of a resumption of a bearish trend.


GBP/USD - Daily

On the lower time frame, GBP/USD traded higher at the end of last week as expected after market completed a corrective retracement down in wave B at 1.4117 as noted in our previous update. Notice that price recovered sharply with more than 320 pip rally from that swing low so looks like that price action is impulsive; ideally wave C of IV which can then reach another high at 1.4450-1.4500 area. Ideally pair will turn down from there later this week. Break of 1.4253 will suggests that high is already in place.


GBP/USD - 4hr

About the Author

Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/