The article covers the following subjects:
Major Takeaways
- Main scenario: Once the correction ends, consider long positions above the level of 1.2605 with a target of 1.3750 – 1.4000. A buy signal: the price holds above 1.2605. Stop Loss: below 1.2550, Take Profit: 1.3750 – 1.4000.
- Alternative scenario: Breakout and consolidation below the level of 1.2605 will allow the pair to continue declining to the levels of 1.2342 – 1.2100. A sell signal: the level of 1.2605 is broken to the downside. Stop Loss: above 1.2660, Take Profit: 1.2342 – 1.2100.
Main Scenario
Consider long positions above the level of 1.2605 with a target of 1.3750 – 1.4000 once the correction is formed.
Alternative Scenario
Breakout and consolidation below the level of 1.2605 will allow the pair to continue declining to the levels of 1.2342 – 1.2100.
Analysis
The ascending first wave of larger degree 1 of (A) is formed on the daily chart, and the bearish correction is presumably completed as the second wave 2 of (А). The third wave 3 of (А) started developing on the H4 time frame, with the first counter-trend wave of smaller degree i of 3 formed as its part. On the H1 time frame, apparently, a local correction has started developing in the form of the second wave ii of 3. If the presumption is correct, the GBP/USD pair will continue to rise to the levels of 1.3750 – 1.4000 after the correction ends. The level of 1.2605 is critical in this scenario, as a breakout will enable the pair to continue declining to the levels of 1.2342 – 1.2100.
This forecast is based on the Elliott Wave Theory. When developing trading strategies, it is essential to consider fundamental factors, as the market situation can change at any time.
Price chart of GBPUSD in real time mode
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