GBPUSD Technical Analysis, July 1, 2020

Exclusive Markets Analysts
Exclusive Markets Analysts

GBPUSD:


Technical Outlook:

GBPUSD might have entered a corrective phase towards 1.1900, before the rally could resume. The drop from 1.2810 has sub-divided into 5 waves towards 1.2260 lows, before pulling back yesterday. The rally could extend towards 1.2500/30 levels before finding resistance.

The probable wave counts could be as follows: GBPUSD rally between 1.1414 and 1.2800/10 can be seen in clear 5 waves. The 5th wave fell short of the fibonacci extension at 1.2850 and GBPUSD reversed lower. The entire rally can be labelled as a higher degree Wave (1) on the chart.

After a 5 wave rally, it is normal to expect a 3 wave drop in the opposite direction. GBPUSD has dropped from 1.2800/10 handle through 1.2260, sub dividing into 5 waves (potential leading diagonal). This drop could be labelled as Wave A of the proposed A-B-C correction.

Yesterday’s rally has been in accordance to our expectations of a potential Wave B termination around 1.2530. The 1.2530 handle is close to the fibonacci 0.50% retracement of the previous drop (Wave A). Normally Wave B corrects Wave A by 50% pullback.

Once Wave B terminates close to 1.2500/30 levels, thee drop could resume lower toward 1.1950 handle, to terminate the last Wave C of the entire corrective drop. Please note, Wave C could also be marked by Wave (2) termination of one larger degree.

Thereafter, we can expect a Wave (3) rally to resume towards 1.3500 and 1.4300 respectively. For now, GBPUSD is expected to complete Wave (2) correction towards 1.1900/1.2000 handle. Overall, GBPUSD remains a sell on rallies case, at least for a short time.


Trading Strategy:

Aggressive Short against $1787/90, targeting below $1046 in the long term.


Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.

Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.

Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.

Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.

Share this post    

Share on facebook
Share on twitter
Share on linkedin
Share on email