GBP/USD Elliott Wave
Last week the GBP/USD pair was trading in a downward move, impulsive 5 wave (coloured blue) of the bigger (3) wave (coloured green) was developing. Yesterday during the Asian and European sessions we could observe strong descending movement from 1.5783 toward the 1.5715 level. Therefore, during the New York session this major pair continued trading in a bearish mood and the price reached a new low at 1.5673 level. We can consider this move as the end of the impulsive (3) wave (coloured pink) of the bigger 5 wave (coloured blue). At the moment the GBP/USD pair is trading at the end of the (4) wave (coloured pink) and we are expecting to see the price higher when development of the (4) wave (coloured green) starts. In accordance with our wave rules and taking into account that the wave 4 should retrace 38.2% of the wave 3, we can define the potential targets with measuring wave 3 with take profit at 1.5845 (38.2% of wave 3). To reduce the risk, we can use support at 1.5600 level as stop loss.
Support and Resistance
(S3) 1.5606 (S2) 1.5649 (S1) 1.5675 (PP) 1.5717 (R1) 1.5760 (R2) 1.5786 (R3) 1.5828
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1.5655 with stop loss 1.5600 and take profit at 1.5845 are recommended.
