FX.co ★ Elliott wave analysis on GBPUSD

GBPUSD is bouncing strongly above 1.30 breaking the sequence of lower lows and lower highs. Price has reversed off the 50% Fibonacci retracement of the first leg up and according to our analysis there are many chances that the corrective wave C and the entire pull back from 1.35 is over.

Since mid-December price has showed us that a corrective phase was starting and that is why in our analysis we noted that a three wave correction should follow. Price has now reached the area of wave 4 of lesser degree and the 50% retracement. Price is bouncing higher.

We have enough evidence to say that there are many chances the entire correction is over and the next leg up has started. What are our targets now? If price continues to move with higher highs and higher lows in an impulsive pattern, we should expect GBPUSD to reach 1.37 first and then 1.43.

GBPUSD has support at 1.2720. Next resistance is at 1.3210. Breaking and staying above it will increase chances dramatically for a move towards 1.37. Concluding we have short-term reversal signals promoting our bullish wave scenario for a move towards 1.37 at least.