Simple Moving Average(SMA) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
Multiple Time-frame Analysis
- The GBP/USD is contained in a declining channel after nearly testing 1.63. The decline has so far retraced 50% of the previous rally at 1.6050. The market now with a failed rally attempt is declining again towards this low.
A break below 1.6050, suggests a test of 1.60. This will be a cluster of the 61.8% retracement and 78.6% projection of the swing from 2/3/ to 2/5 to the current down swing.
- The 200SMA is just above this as well.
- The bullish scenario is significantly weakened if the market slides below 1.60, especially considering that it will invalidate the bullish impulse wave count seen in the 4H chart.
- Looking at the daily chart, we see that at the completion of wave 5, we should also complete a larger degree wave V, and a stronger correction from 1.63 can then be expected, back towards 1.57/1.5750.
- Therefore, we are still anticipating a rally in the short-term after the near-term bearish correction. Then after the rally is exhausted, we should have a more meaningful correction.
Will the GBP/USD have one more rally to complete wave 5, V? Will there be a meaningful correction to this early 2011 Sterling strength? We would love to hear what you think.
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Fan Yang CMT
Chief Technical Strategist