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:

Elliott Wave Support Can Send USDZAR 15% Higher

It’s been a bad year for USDZAR bulls. The pair has been declining ever since it reached a high of 19.34 in early-April 2020. As of this writing, it is barely holding above 14.30, down 26% in a little over twelve months. Does this mean now is a good time to join the bears? We…

Read More »

Ahead of EURUSD ‘s Disappointing Start to 2021

Overall, 2020 was a good year for EURUSD bulls. Despite the March crash during the coronavirus-related volatility, the pair ended the year up almost 9%. With more stimulus already in the pipeline at the start of 2021, it made sense to expect further devaluation of the dollar against the Euro. Alas, common sense doesn’t always…

Read More »

USDJPY Gains 450 Pips and Counting in Two Months

2020 wasn’t a good year for USDJPY bulls. Starting from 108.63 in January, the pair closed at 103.32 on December 31st, down 4.9% in twelve months. But what the dollar lost against the yen in the entire 2020 it is now close to recouping in less than three months. USDJPY is approaching 108.50 as of…

Read More »

USDTRY Drop Accelerates as Elliott Wave Predicted

The Turkish Lira hit its highest level against the U.S. dollar in six months. The country economic and legal reforms announced last year coupled with tighter monetary policy appear to be giving the desired effect. USDTRY is down 19.3% from its November 2020 high after being in an uptrend since mid-2008. Most analyst, however, are…

Read More »

EURUSD Surges 570 Pips After Fibonacci Encounter

EURUSD is trading at levels last seen in April 2018, when it was on its way down to 1.0636 by March 2020. The pair is now approaching 1.2200, up 14.5% since the COVID-19 selloff nine months ago. But trends don’t move in a straight line. Two months ago, we showed you how Elliott Wave analysis…

Read More »

USDTRY Heads South After Central Bank Decision

Turkey finally took a decisive step towards taming the double-digit inflation, which has been destroying the Lira’s value for years. The country’s central bank lifted the benchmark interest rate to 15%, up 475 basis points from its previous standing. USDTRY fell as low as 7.5031 earlier today, on track for a second consecutive week of…

Read More »

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 »

More analyses