GBPUSD might be forming a cycle top at 1.6692 level on daily chart, key support is now located at 1.6251, a breakdown below this level will confirm the cycle top, then another fall could be seen to test 1.5708 previous low support. However, a break above 1.6741 key resistance will indicate that the fall from 1.7042 has completed at 1.5708 level, then further rebound towards 1.0742 previous high could be seen to follow.
For long term analysis, GBPUSD has formed a cycle top at 1.7042 level on weekly chart. Further fall to 1.5000 area to reach next cycle bottom is expected in next several weeks.
Let’s end the week with a daily view of the most heavily traded currency pair in the world. The EURUSD has bounced from the trendline that is drawn off of April and September lows (another potential channel line is the lower line, in blue). I do expect a break and sharp decline, as per the wave count, sentiment readings, and recent divergent/overbought momentum readings. I indicated yesterday that “my focus is on resistance in the No change from yesterday – “The decline from 1.7050 could be a series of 1st and 2nd waves, part of a leading diagonal, or a 3 wave correction. Price action since 1.6750 could also be in the mold of a triangle. There are many possible counts right now but most point lower with 1.6700 intact. Be particularly cautious here though as the GBPUSD rally has accelerated (albeit through a very short term resistance line) and 1.6700 is in imminent danger.”
GBPUSD continues moving sideways above 1.6251. The price action from 1.6251 is more likely consolidation of downtrend. Another fall towards 1.6000 is still possible after consolidation, and a breakdown below 1.6251 level will signal resumption of downtrend.
Former supports are now resistance at 1.6484 and 1.6530. Strategy is to short on rallies to these levels. The decline from 1.7050 could be a series of 1st and 2nd waves, part of a leading diagonal, or a 3 wave correction. Price action since 1.6750 could also be in the mold of a triangle. There are many possible counts right now but most point lower with 1.6700 intact.
After a sharp drop from 1.6692, GBPUSD trades in a range between 1.6251 and 1.6450. Price action from 1.6251 is more likely consolidation of downtrend. Another fall is expected after consolidation and a break below 1.6251 will signal deeper decline towards 1.6000 zone.
Former supports are now resistance at 1.6484 and 1.6530. Strategy is to short on rallies to these levels. The decline from 1.7050 could be a series of 1st and 2nd waves, part of a leading diagonal, or a 3 wave correction. Price action since 1.6750 could also be in the mold of a triangle. There are many possible counts right now but most point lower with 1.6700 intact.
After a sharp drop from 1.6692, GBPUSD trades in a narrow range above 1.6251, suggesting a minor consolidation is underway. Range trading between 1.6251 and 1.6450 would more likely be seen later today. However, deeper decline is still possible after consolidation and a break below 1.6251 level will signal another fall towards 1.6000 zone.
