close icon

EURGBP Pattern Signals Bullish Reversal Ahead

EURGBP has been in free fall since March 19th, when it rose to 0.9500. A month and a half later now, the pair is hovering below 0.8730, down 8% from the peak. Is the downtrend going to continue or should we expect a change of direction? That is the question we hope to answer in this short article.

Currency exchange rates are impacted by many factors such as central bank policies, imports/exports, , government debts and traders’ speculations, to name a few. Add COVID-19 to the mix and the situation becomes nearly impossible to understand. So instead of tracking all those factors, we prefer to focus on the price charts, which reflect them all, and search for patterns there.

Bullish Reversal in EURGBP seems likely near 0.8600

EURGBP’s 4-hour chart reveals that the decline from 0.9500 is an almost complete five-wave impulse. The pattern is labeled 1-2-3-4-5 on the condition that wave 5 is still developing. Wave 3 is extended and its five sub-waves are also visible. Wave 4, in turn, is an a-b-c-d-e triangle correction.

Triangles precede the final wave of the larger sequence. This means that once wave 5 is over, a bullish reversal can be expected. Besides, according to the Elliott Wave principle, a three-wave correction in the other direction follows every impulse.

If this count is correct, we should anticipate a new low in EURGBP to form around 0.8600 – 0.8500. But instead of seeing this new low as a reason to join the bears, traders should prepare for a move in the opposite direction. Once wave 5 is over, a recovery to 0.8900 or higher would make sense.

What will EURUSD, USDJPY and USDCAD bring next week? That is the subject of discussion in our next premium analyses due out late Sunday!



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

GBPNZD Can Slide to Sub-1.9000 In Coming Weeks

What will EURUSD, USDJPY and USDCAD bring next week? That is the subject of discussion in our next premium analyses due out on Sunday! GBPNZD exceeded 2.0270 in mid-August, but the bulls could not keep the positive momentum. A month later, the pair fell to 1.9055, losing 6% in the process. And just when it…

Read More »

Ahead of EURUSD ‘s 280-pip Drop in September

EURUSD had been on a tear since mid-March when it bottomed out at 1.0636. Nearly six months later, on the first day of September, the pair exceeded the 1.2000 mark. The bulls seemed firmly in control and the Fed’s money printing suggested further losses ahead for the dollar. However, years of experience had taught us…

Read More »

Ahead of GBPUSD in Both Directions. Now What?

GBPUSD had a good run over the past six months, climbing from its 1.1412 March low to as high as 1.3483 last week. The pair is now back below 1.3000 after the latest portion of Brexit-related mess. Later in this article we will share our view of where the Pound is headed against the dollar,…

Read More »

USDTRY Set to Complete 12-Year Impulse Pattern

The U.S. dollar has been steadily climbing against the Turkish lira since 2008. Ten years later, in 2018, USDTRY reached 7.1500 on the back of geopolitical tensions and President Erdogan‘s reckless political decisions. In May 2019, however, the pair was down to 6.0600 and it looked like the Lira’s plunge might be finally over. Unfortunately,…

Read More »

EURUSD Up 420 Pips in a Month as Uptrend Resumes

The inevitable seems to be happening to the U.S. dollar. After record-breaking liquidity injections by the Fed in response to the COVID-19 crisis, the greenback is weakening across the board. The U.S. dollar has recently been declining against its major rivals, including the Yen, the pound and the euro. EURUSD, the most traded Forex pair…

Read More »

GBPJPY Bears Aiming at 120, Before Giving Up

Whether it is because of Brexit or not, GBPJPY has been trading below 160.00 ever since the referendum in June 2016. The pair has been locked in a wide range between 156 and 124 for four years now. Last week, it closed the session at 134.66, down from 138.84 at the open. In order to…

Read More »

Elliott Wave Setup Helps EURUSD Add 325 Pips

EURUSD has been under pressure for over two years now. The pair reached 1.2556 in February 2018, but has been making lower lows and lower highs ever since. Yet, the past couple of weeks painted a different picture. Between May 18th and May 29th, the euro surged 325 pips against the U.S. dollar. In those…

Read More »

More analyses