Elliott Wave View: GBPUSD Impulsive Decline Suggests More Downside

Trading Discussion Currencies
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Short Term Elliott Wave view in GBPUSD suggests that the rally to 1.3516 ended wave ((A)). This rally ended cycle from 9.3.2019 low as a 5 waves impulsive Elliott Wave structure. Pair is now correcting cycle from 9.3.2019 low within wave ((B)) as a zigzag Elliott Wave structure. A zigzag is a 3 waves structure with ABC label and subdivision of 5-3-5. The first leg wave A subdivides as a 5 waves impulse. Down from 1.3516, wave ((i)) ended at 1.3304 and wave ((ii)) bounce ended at 1.342. Pair then extended lower in wave ((iii)) towards 1.307 and wave ((iv)) bounce ended at 1.313.

Wave ((v)) is expected to end soon and this should complete wave A of ((B)). Afterwards, pair should bounce in wave B to correct cycle from 12/13/2019 high in 3, 7, or 11 swing before the decline resumes. We don’t like buying the proposed bounce and expect sellers to appear in the sequence of 3, 7, or 11 swing as far as pivot at 1.3516 stays intact. Potential target for wave ((B)) is 50 - 61.8% Fibonacci retracement of the rally from 9.3.2019 low which comes at 1.232 - 1.273.

GBPUSD 1 Hour Elliott Wave Chart

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Or a little more simply - wave A was the euphoria of the election result Friday Dec 13th - then the numbers kicked in Monday morning.

First pmi on manufacturing a miss, not so big, then pmi on services a miss - that’s a biggie.

Then Wed inlaftion at 1.5% was not a miss - but wait… the BOE state a target of 2% but before they would even consider a interest rate raise so maybe Thursday will show a sign of consumer spending that could perhaps show some light.

Not to be, Retail Sales at minus 0.6 a miss - not a good omen.

Then the MPC count later in the day to reinforce - still 2 members looking to cut rates.

For a little added spice to the mix the PM reminded the market that a trade deal with the EU must be completed by the Dec 2020 or else.

Would i rush out a buy GBP - hmmm… lets see retail sales for Dec for more info.