Executive Summary
- GBPUSD is declining in wave c of (ii)
- Bearish targets include 1.2730 and 1.2540
- The forecast remains valid so long as price remains below 1.3047
GBPUSD Event Risk Coming Up
The US election is winding down. The Fed and Bank of England are up next.
On Thursday, both central banks will share their brilliance on the economy and the expected path of interest rates.
A 25 basis point cut is widely expected by both the Fed and BOE. The biggest potential for a surprise would be the Fed’s press conference as the streets tries to gauge the strength of the wind blowing.
Current Elliott Wave Count
The current Elliott wave count for GBPUSD on the intraday chart is wave c of (ii), a declining wave. The pattern for wave (ii) would be an a-b-c bearish zigzag pattern.
After carving a double top pattern to yesterday’s high, Cable has fallen hard today.
There are a couple of targets we are closely monitoring. There are some harmony of wave relationships appearing near 1.2730 and 1.2540.
1.2723 is where the 61.8% Fibonacci retracement level of the April to September uptrend sits. Additionally, the 61.8% Fibonacci extension crosses at 1.2730. This is where wave c of the zigzag pattern would be 61.8% the length of wave a.
The secondary target zone is 1.2540. At 1.2537 is the 78.6% Fibonacci retracement level. The 100% Fibonacci extension for wave c relative to wave a is at 1.2539.
Bottom Line
GBPUSD is in a decline that could carry down to 1.2730 or 1.2540 so long as prices do not rally above 1.3047.
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