GBP/USD Elliott Wave Analysis : Unraveling the Powerful Zigzag Correction and Targets 2023

In this technical analysis, we will delve into the GBP/USD currency pair, focusing on the current short-term view. The analysis suggests that a zigzag correction is underway, with wave 2 currently in progress, based on the Elliott Wave structure.

Understanding the Elliott Wave Analysis

Elliott Wave analysis is a powerful tool used by traders to analyze financial markets based on repetitive wave patterns. The structure consists of impulsive waves (designated by numbers) and corrective waves (designated by letters). In this analysis, we will examine the ongoing corrective wave, labeled as wave 2.

Wave 1 and the Zigzag Structure in GBP/USD

The analysis begins with the end of wave 1, which reached 1.3143, initiating the corrective wave 2. The current wave 2 takes the form of a zigzag pattern, comprising five sub-waves labeled as (i), (ii), (iii), (iv), and (v).

Sub-Waves within the Zigzag Structure

  1. Wave (i): The first sub-wave of the zigzag correction ended at 1.305, indicating a downward movement from wave 1.
  2. Wave (ii): This sub-wave witnessed a rally and concluded at 1.3126.
  3. Wave (iii): The third sub-wave resulted in a decline towards 1.2867.
  4. Wave (iv): After wave (iii), there was a corrective rally that reached 1.2965.
  5. Wave (v): The final sub-wave (v) brought the pair to 1.2839, concluding the zigzag correction.

Completing Wave ((a)) and the Expanded Flat Structure

Wave ((a)) of the overall correction is now complete. The subsequent wave ((b)) took the form of an expanded flat structure, consisting of sub-waves (a), (b), and (c).

  1. Wave (a): The first sub-wave of ((b)) concluded at 1.2904.
  2. Wave (b): This sub-wave resulted in a decline, ending at 1.2797.
  3. Wave (c) of ((b)): The final sub-wave of ((b)) witnessed a rally, reaching 1.2997.

GBP/USD Next Steps: Wave ((c)) and Potential Targets

Currently, the pair is expected to extend lower in wave ((c)). Breaking below the previous expanded flat wave (b) low at 1.2797 signals the start of the next downward movement.

The downward movement, known as Wave ((c)), has initiated, and the first sub-wave, Wave 1 down, has concluded at 1.27629. At present, the market is experiencing a corrective movement, labeled as Wave 2 up, which is expected to retrace approximately 38% to 61.8% of the Fibonacci level. This upward retracement can be utilized as a potential selling opportunity for the forthcoming Wave 3 down

Short-term Outlook and Potential Target for Wave 2

As long as the pivot at 1.2997 remains intact, a rally is expected to fail in 3, 7, or 11 swings, leading to further downside movement. The potential target for wave 2’s lower position lies within the range of 100% – 161.8% Fibonacci extension of wave ((a)), projected at 1.256 – 1.269.

Conclusion

In conclusion, the GBP/USD currency pair is undergoing a zigzag correction, and wave 2 is currently in progress. The analysis indicates potential downside movement towards the target range of 1.256 – 1.269 as long as the pair remains below 1.2997. Traders should exercise caution and consider other technical indicators before making trading decisions based on this analysis.

Readers interested in further analysis may also want to explore our recent posts on BTC/USD and Gold.

Disclaimer:

The information provided in the post titled “GBP/USD Elliott Wave Analysis: Unveiling the Zigzag Correction and Potential Targets” is for educational purposes only and should not be considered as financial advice. Trading in financial markets involves risk, and readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions. The author and the platform hosting the post are not responsible for any financial losses or consequences resulting from the use of the information presented in the article. Past performance is not indicative of future results.

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