GBP/USD Takes Shape of a Triangle Pattern
GBP/USD appears to be putting the final additions on a bearish triangle pattern. Under the guidelines of the pattern, price may soon pivot lower towards new lows below 1.1900.
If correct, this triangle would be in the 4th wave position of a bearish impulse that began in 2014. Once this corrective sequence ends, then GBPUSD may pressure new lows.
The risk to the pattern is set at the wave C high of 1.2706. A move above 1.2706 suggests the pattern cannot be counted as illustrated and some other pattern is developing.
In Elliott Wave triangles, many times wave E will penetrate the trend line connecting the ends of waves A & C. This trend line comes into play near 1.2635.
We also have some wave relationships appearing in the 1.2515-1.2625 price zone so there are a few obstacles standing in Cable’s way.
So long as prices are below 1.2706, downside wave relationships and targets exist near 1.1900.
Join Jeremy in his Monday US Opening Bell webinars to discuss this market.
Interested in learning more about Elliott Wave Theory? Watch these videos on trading with Elliott Wave.
Lastly, check out our longer-term forecast for US Dollar and GBP.
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---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.