GBPUSD - Is the Royal Lion Ready to Roar Again?

FX:GBPUSD   British Pound / U.S. Dollar
Originally prepared on 21st October 2014:
On weekly time frame for "Big Picture" view and perspective of larger trend ( ) , we note that from 2007 high GBPUSD             fell to 2009 low. Since then it has been in mostly sideways range July 2014 low. Many were quick to write GBP off with bearish targets well below 2009 low. For some reason this bearish sentiments has not disappeared and has been revived during the recent off from July 2014 high. However, Based on my Elliott Wave counts as shown in the chart this decline appears to be merely 50% fib retracement in to potential support from previous resistance zone and now also from rising 200 period moving average.

Should this play out then in due course upside target of the next leg could be 1.8 and might extend to 1.85. So this could be our road map for next 12 months or so which we will update and monitor.

Zooming in to Daily Time Frame:

At 50% fib retracement of the move from July 2013 - July 2014 and at 200 period moving average on weekly chart, we also seem to have wave c completing with ending diagonal ( falling wedge ) suggesting that potential low is in place already. From which we have developed initial rally that could be the fist minor wave i of the next bullish cycle. Therefore, on completion of this minor wave i, we are likely to retrace back to 1.60 area or little lower, where potential long entry could be considered with stop at 1.5850 and looking for retest of July high around 1.72 area as initial target. Further refinement could be achieved for entry and stop by looking at lower time frame which I will leave it to you to carry out employing your usual method or analysis for your trade planning. We will continue to monitor and update as necessary as we follow this pair on weekly basis.
An updated short to intermediate term chart published
+1 Reply
I have the same idea as you :) this looks like a good long doesn't it, lots of room to the upside!
DanV I like your vision with this chart but thw WXY is nebulous. One can count BTC from wave 0 to present in WXYXZ and re-organize it to WXY(wxy)((w))-((x)) and what does that establish? It's non-committal. Say $500, $300, $1500 and there is some sense of ownership and cock-on-the-block that pundits want to see, right?
DanV venzen
Appreciate your comments. Understand that WXY might seem like non committable. However, it is basically correcting the move from 2007 high, That has not been in the form of abc with wave c displaying necessary 5 wave internal structure. So it is complex zigzag, even if my counts are to be re-labelled to some alternative, it would not alter the fact that it is still in retracement move which is not over yet in my view. Specially with DXY and other correlations suggesting that USD weakness is in store. But of course will review it when necessary.
Fair enough and always like your alternative takes on the wave relationships.
DanV venzen
You are welcome. Thanks for your comments.
I'd only be shorting anything verses the dollar right now. It's in a long cycle up till next year at least.
DanV 99nines
Yes you could be right, but the upside on USD could be limited. Unless it develops multi-year bullish cycle. That is not necessarily a foregone conclusion just yet. Thanks for your comment.
+1 Reply
Couldn't agree more with this comment @DanV. Lots of resistance ahead in the Dollar to get through before we call this a break of the long term downtrend and develop a new bull trend . As always appreciate your analyses.
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