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:

NZDUSD Fibonacci Bounce Causes Optimism

At the start of December, 2018, NZDUSD almost reached 0.6970. A month later, the “flash crash” which brought chaos to many other Forex pairs, dragged the New Zealand dollar to 0.6586 on January 2nd, 2019. As of this writing, NZDUSD is hovering around 0.6760 and the bulls are probably wondering whether this is a chance…

Read More »

GBPNZD ‘s Elliott Wave Recovery Far from Over

A month ago we shared our view that despite being long-term bearish on GBPNZD, we thought it was time for a notable recovery. While the pair was hovering around 1.8400, the market was sending a message that a recovery to roughly 1.9000 was around the corner. As always, this message had nothing to do with…

Read More »

USDJPY Crashes After Textbook Elliott Wave Setup

It is not just stock market investors and oil bulls, who have been suffering lately. The holidays do not promise to be very happy for USDJPY bulls, as well. The pair fell to 110.81 on Thursday, revisiting levels last seen in early September. The Fed rate hike, the stock market crash and the tensions between…

Read More »

GBPNZD: Support Ahead, Downtrend Still in Progress

On November 2nd, GBPNZD was trading above 1.9550. As of this writing, the pair is hovering slightly below 1.8400, meaning the British pound lost over 1150 pips against the New Zealand dollar in a single month. Fortunately, the Elliott Wave Principle put traders ahead of this sharp selloff. The chart below, published on November 5th,…

Read More »

EURNZD Bulls Look Better Going into December

Yesterday, we shared our view that despite being down by over 460 pips this month, a bullish reversal can be expected in EURAUD around 1.5500. Now, we are going to take a look at EURNZD, which lost even more in November. The pair plunged from 1.7359 to 1.6515 in the last thirty days, following a…

Read More »

EURAUD Bears Getting Tired. Bullish Reversal Ahead?

With only one day left, the Euro seems poised to end November in positive territory against the U.S. dollar, following a sharp decline in October. Unfortunately for the bulls, the European currency is still losing to some of its other rivals this month. EURAUD, for example, is down by over 460 pips since the start…

Read More »

AUDUSD Looking for Support near 0.7160

AUDUSD climbed to 0.8136 in January, but similarly to other major currencies, spent the rest of 2018 declining against the U.S. dollar. The pair fell to 0.7021 on October 26th, but recovered to 0.7338 on November 16th. As of this writing, the Aussie trades at 0.7267 versus the greenback. Should we expect the downtrend to…

Read More »

More analyses