GBPUSD’s Next Move: Uncovering the Mystery of its Future Direction for Sep 2023

In our previous post titled “Is GBPUSD Ready for an Upside Turn? Decoding the Final Downside Wave,” we discussed that the GBPUSD currency pair was in the final stage of a corrective pattern that is wave z, suggesting a potential change in direction. After the completion of this final wave, we observed a bounce towards the upper boundary of a downward channel.

GBPUSD 1 hour chart : Anticipated  wave Z near to completion and bounce possible

Is GBPUSD Ready for an Upside Turn

GBPUSD 1 hour chart : Happened  given a bounce post wave z (shown in green box)

GBPUSD elliott wave

GBPUSD’s Next Move & Elliott Wave analysis

Now, let’s analyze what’s likely to happen next. Currently, GBPUSD is trading within this descending channel, characterized by a pattern of lower highs (LH) and lower lows (LL). It has also undergone a complex correction, labeled as w-x-y-x-z. Currently, the pair seems to be in a phase of time correction for wave z.

Here’s what traders should be looking for:

  1. Change in Structure: Traders should exercise patience and watch for a change in the price structure. Specifically, they should look for a shift from lower highs (LH) and lower lows (LL) to higher highs (HH) and higher lows (HL). This change would confirm a potential trend reversal.
  2. Confirmation Points: To confirm the trend reversal, traders should wait for two key signals. First, a decisive breakout above the upper boundary of the descending channel. Second, the pair should break above the previous swing top which is 1,28189.
  3. Buy on Dips Strategy: Once these confirmation points are met, traders can consider implementing a “buy on dips” strategy. This means looking for opportunities to buy the pair on pullbacks or temporary declines in price. These pullbacks should be considered as potential entry points for long positions.
  4. Channel Support: Keep a close eye on the lower boundary of the channel (channel support line). If the pair approaches this level and shows signs of demand, such as the formation of bullish patterns, it could present an additional buying opportunity. Make sure to set tight stop-loss orders to manage risk.
  5. Avoid shorts: It is advisable to refrain from short positions, even if there is a chance of one more downward move towards the channel support. Given that this is the final wave, there is a possibility of a trap for short sellers. Instead, exercise caution and patience, waiting for a suitable buying opportunity as discussed in the previous analysis.

In summary, the analysis suggests that GBPUSD may be on the verge of a trend reversal. Traders should patiently wait for confirmation through changes in the price structure, channel breakouts, and previous swing top breaches before considering long positions. Additionally, they should be vigilant for potential buying opportunities near the channel support line if demand emerges. Risk management through stop-loss orders is essential in any trading strategy.

What is Elliott Wave Theory ?

  1. Elliott Wave Theory is a roadmap of market sentiment, revealing the intricate dance of fear and greed in price movements.”

Pros of Elliott Wave Theory

  1. “Elliott Wave Theory helps traders anticipate market turns by providing a structured framework for understanding price patterns.”
  2. “It offers a holistic view of market psychology, helping traders make sense of complex price movements.”
  3. “Elliott Wave Theory can be applied to various financial markets, from stocks to currencies, making it a versatile tool for traders.”
  4. “By identifying market cycles, it assists traders in managing risk and optimizing entry and exit points.”
  5. “It encourages disciplined trading, as adhering to wave guidelines can enhance trading consistency and decision-making.”

Disclaimer: This information is for educational purposes only and should not be considered as financial advice. Trading involves risk, and decisions should be made with careful consideration of your own financial situation and risk tolerance.

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