GBP/USD Elliott Wave: Cable is Charged

Executive Summary

• GBPUSD in the early stages of a 3rd wave rally.
• Bulls prevail while above 1.3302.
• Targets are 1.37 and higher levels over the coming weeks.

Back on February 11, we highlighted two Elliott wave counts, a bullish and bearish model. Turns out the bearish model was favored and the roadmap was provided. Now that GBP/USD appears to have fully charged, it is plugged in and ready to rally.

GBPUSD Elliott Wave Count

It appears GBPUSD carved a secondary bottom of 1.3302 to open this trading week. I’m viewing that low as wave (ii) of a larger bullish sequence. That makes this week’s rally as wave ((1)) of i of (iii). This Elliott wave count hints that a strong bullish trend is beginning. Though prices may dip over the next few days, so long as Cable holds above 1.3302, then a strong advance may clear 1.37 in the coming weeks.

So far, in micro wave ((2)), GBPUSD has retraced the minimum threshold for ((3)) of i of (iii) to begin. If GBPUSD needs to correct further, it would be considered normal for a decline to 1.3333 to finalize micro wave ((2)).

In the unexpected event of GBPUSD falling below 1.3302, then this wave count would be voided and we’ll consider other alternative counts. Alternates would include wave (ii) was still unfolding to the downside.

Bottom Line

GBPUSD appears to be charged and ready for a 3rd wave rally. These tend to be the strongest rallies of the 8-wave Elliott wave sequence. So long as GBPUSD holds above 1.3302, then a rally to 1.37 and higher levels is what the model forecasts. If 1.3302 is broken to the downside, then wave (ii) is still carving.