SteveTobin

GBPUSD explodes higher, what do the waves say

FX_IDC:GBPUSD   British Pound / U.S. Dollar
The Monetary Policy Committee voted to keep rates unchanged in the UK but the big news was that the vote changed from 7-2 to 6-3 with one extra member voting for a rate hike. Seasoned traders will know this means very little if anything at all, the value of the pound is unlikely to get a meaningful boost from this piece of news indeed it has all the symptoms of a 'news trap' a piece of news that causes a price change sucking in retail traders before reversing and taking their accounts with them.
The Wave structure of the market is often helpful in these situations, and as the chart shows the GBPUSD is in a confirmed downtrend having registered a new low just a few days ago. The structure suggests that the move lower is going to extend as the first wave down appears to count in 5 waves. The bounce appears to have happened exactly where the end of the first wave lower was likely to happen and as a result may be simply the correction of that first wave lower. As a result, I will be looking to sell this bounce if it unfolds in a recognisable pattern (one that I can predict the end of with some probability of success). I did a video recently on how to predict the end of these pullbacks and you are welcome to check it out (link below)

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