GBP/USD Elliott Wave Cycles Point Higher To Yearly Highs

Summary

  • Covid cases drop in the UK
  • BOE can have positive impact on Cable
  • GBPUSD unfolds wave 5 to the yearly highs

Also BOE policy this Thursday can have a positive impact on cable as well.

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GBP/USD is bouncing away from 38.2% Fibonacci support level as expected which suggests that wave four might have ended and that wave five is underway back to the yearly highs. In the meantime 1.3474 remains invalidation level as wave four must not trade into a territory of a wave one.

GBPUSD Daily Elliott Wave Analysis Chart

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On 4h chart we can see pair is making a nice five waves up from the lows so this trend will be expected to resume after any three wave set-back. First support is at 1.384 area while lower support zone is then at 1.3720-1.3785.

GBPUSD 4h Elliott Wave Analysis Chart

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Elliott Wave Cycles Point Major Forex Pairs Trade At Bottom

Summary

  • Major pairs trade at the bottom
  • EURUSD tries to complete an ending diagonal
  • GBPUSD bounced with impulsive wave structures
  • Aussie is also trying to find the support

First support is at 1.1760 followed by 1.1700. Divergence on the RSI also indicates a potential bounce, ideally once an ending diagonal is finished.

EURUSD 4h Elliott Wave Analysis Chart

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GBPUSD is turning around after a nice five wave drop to 1.3569. We have seen a drop below April level for a short period of time which gives an impression that market has bottomed, possibly even completed flat correction. However, the most important is current intraday bullish impulse from the low which suggests more upside ahead, especially after a broken channel resistance line near 1.3800

GBPUSD 4h Elliott Wave Analysis Chart

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AUDUSD turned back to the lows again but it came down out of wave 4) running triangle pattern which suggest the final leg, probably wave 5) of C is unfolding, before a reversal. So, bounce and recovery may occur anytime soon, ideally in impulsive fashion which is needed to confirm a change in trend.

AUDUSD 4h Elliott Wave Analysis Chart

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Bitcoin: Elliott Wave Cycles Approaching The Support

  • BTC inflows triggers more weakness
  • BTC unfolds first leg of A-B-C correction within Wav (IV)
  • Supports: 24k, followed by 20k.

What we also noticed recently is that there were a lot of BTC inflows recenty, which makes you wonder why? It may sound bullish, but its not. “”Its like if bring a car into a car-shop; you obviously have a different idea-exchange it for something else.” It can be one of the reasons why BTCUSD can see a final dip, maybe even on big volume which was often the case on cryptocurrencies before market stabilized; similar personality with downtrend on stocks.

Bitcoin inflows

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From an Elliott Wave approach BTCUSD turned down exactly from projected resistance area back in April when we spotted a top with an ending diagonal that completed wave V of (III). So far we see a nice turn down into wave (IV) correction, which will obviously take even more time to unfold as we see five waves down from the highs as part of the first leg, wave A. So, after a corrective recovery in wave B, that can occur anytime soon, we will have to be aware of another sell-off for wave C to complete a three-wave A-B-C correction .

Bitcoin Daily Elliott Wave Analysis Chart

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Bullish Looking Crude Oil May Push USDMXN Even Lower

As you may already know, in risk-on sentiment investors are confident, so stocks are bullish. Risk-on mode is in play since March lows and seems like it may continue into January of 2021.

The main reason for a bullish continuation in the stock market in risk-on mode is also bullish looking Crude oil, which has an unfinished five-wave cycle, So more upside is in view for wave »v« towards 50 level, ideally once a correction in wave »iv« fully unfolds with ideal support in the 46-44 zone.

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Bullish continuation on Crude oil may cause more weakness for the USDMXN pair since we know they are in negative correlation. So, USDMXN could easily continue lower, at least for one more push to the downside, especially because of recent short-term A-B-C corrective recovery.

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For a look at all of today’s economic events, check out our economic calendar.