GBPUSD is taking a hit this week, falling from 1.4220 at the start to as low as 1.4005 on Wednesday. This performance is in total contrast with what we saw the previous week, when the bulls managed to lift the pair to almost 1.4460. With all the gains from 1.4056 already erased, the only question is if it was possible to predict the return of the bears in GBPUSD. Yes it was, and our premium clients can confirm it. They received the following chart on Monday, April 4th.(some of the marks have been removed for this article)
As usual, we applied the Elliott Wave Principle to the hourly chart of the pair. The result was suggesting that GBPUSD is likely to weaken this week. That is why we told our clients that “GBPUSD should continue lower and fall below the bottom … at 1.4056… As long as last week’s high at 1.4459 holds, the bears remain in charge.” The Wave principle not only gave us a hint of the market’s most probable future direction, but also provided a specific invalidation level, in order for us to know if we were wrong. The next chart shows how the situation developed.
As you can see, the bulls tried to take the wheel on Monday, but only managed to turn the recently broken line from support into resistance. The critical level at 1.4460 remained out of danger. From then on, the bears were everywhere you look. As expected, 1.4056 could not hold them and GBPUSD plunged to 1.4005. One more time, the Wave principle proves that it deserves your trust. It earned ours long time ago.
What to expect from now on? What is the bigger picture saying? Is GBPUSD going to continue even lower or the support near 1.4000 would turn out to be too strong for the bears to breach? Prepare yourself for whatever is coming. Order your on demand Elliott Wave analysis now or pre-order the one due out next Monday at our Premium Forecasts section. Stay ahead of the news in any market with the Elliott Wave principle.
