close icon

GBPAUD Recovery Interrupts Larger Downtrend

Life has been tough on GBPAUD bulls recently. The pair reached a two-year high of 1.8733 on October 11th, but failed to maintain the uptrend. On December 3rd, the Pound fell to 1.7210 against the Australian dollar – a crash of over 1500 pips in less than two months.

As of this writing, the pair is hovering around 1.7540. Is this the beginning of a larger recovery or merely a correction within an ongoing downtrend? That is the question we hope the Elliott Wave Principle will help us answer.
GBPAUD Elliott wave chart 2h
The 2-hour chart of GBPAUD makes the structure of the decline from 1.8733 visible. It looks like the drop to 1.7210 took the shape of a five-wave impulse pattern in wave (1/A), labeled 1-2-3-4-5. To Elliotticians, this pattern means that GBPAUD is still in a downtrend, but a three-wave recovery can be expected before the bears return.

The rally from 1.7210 to 1.7745 cannot be seen as a complete correction. It seems to be just the first phase – wave A – of the larger wave (2/B) retracement. The decline from the top of wave A does not look compete, either.

If this count is correct, we should expect more weakness in wave B towards the support near 1.7250, followed by a rally to 1.7800 – 1.8000 in wave C. Once wave (2/B) is over, the entire 5-3 wave cycle would be over, as well, and the stage would be set for another selloff in wave (3/C).

Did you like this analysis? Our Elliott Wave Video Course can teach you how to uncover similar opportunities yourself!



Stay informed with our newsletter

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

Privacy policy
You may also like:

USDCNH Before and After Trump’s Tariff Threat

The negotiations between the two biggest economies are not going as well as investors hoped. Stock market indices are down across the board following President Trump’s new China tariff threat. Another side-effect was the sharp rally to over 6.82 in USDCNH. And while Trump’s tweet about China did, indeed, trigger the surge, the actual reason…

Read More »

USDJPY: Analyze, Prepare, then Let the Market Decide

USDJPY reached its higher level so far in 2019 yesterday. The pair climbed to 112.166, extending its recovery from the 109.71 bottom formed last month. But the bulls didn’t always look that confident. Just a week ago, the pair was hovering around 111.15, down from 111.83 five days earlier. Instead of forming an opinion based…

Read More »

USDJPY Proves You Don’t Need to Pick Tops/Bottoms

USDJPY closed at 111.72 last week and is now within striking distance of its 2019 high of 112.14. But just two weeks ago, the pair was down to less than 110.00 after a sharp selloff from 111.70. Instead of joining the bears simply because the price was falling, we looked for an Elliott Wave pattern…

Read More »

USDCNH Elliott Wave Pattern Points to Recovery

Less than five months ago, on November 1st 2018, the U.S. dollar climbed to 6.9806 against the Chinese yuan, following a sharp rally from as low as 6.2359 in March. Unfortunately for bulls, USDCNH couldn’t maintain the positive momentum. As of this writing, it is hovering around 6.7200. In order to find out if the…

Read More »

NZDUSD Bulls Choosing a Path to 0.7000

Less than three months ago, on January 7th, we published an analysis of NZDUSD. It was trading near 0.6750 at the time, following a sharp decline from 0.6970. However, instead of simply extrapolating the selloff into the future, we examined the chart below through an Elliott Wave perspective. And it gave us a few reasons…

Read More »

USDJPY: How to Buy and Hold a Forex Pair

USDJPY has been in recovery mode since the “flash crash” on January 3rd. The pair plunged to as low as 104.82 that day, but the bears couldn’t maintain their momentum. The market reached 112.14 on March 5th for a rally of over 730 pips. Of course, picking up all of it would have been pure…

Read More »

USDCAD Bears Paying the Price for Failing at 1.3069

A week ago, USDCAD was barely holding above 1.3100. The pair was still in the doldrums following a steep decline from its late-December high of 1.3665 and it appeared the bears had no intention of leaving. But in order to confirm their ambitions to drag USDCAD even lower, they first had to deal with the…

Read More »

More analyses