GBPUSD regained negative bias at the start of February and has been losing ground ever since. After forming a top at 1.2706 a month ago, the pair fell to as low as 1.2214 at one moment today and is currently trading near 1.2240. It is interesting to notice that roughly half of this 490+ pip decline happened this week alone, following Monday’s open at 1.2467. Could that be predicted?
Last week we decided it would be a good idea to send our February 27th GBPUSD analysis to anyone, who subscribes, for free. The issue, sent to subscribers before the open on Monday, included several charts, one of which is shown below.(some marks have been removed for this article)
Comprehensive multi-time-frame analysis made us think the post-1.2706 weakness was not over and was going to evolve into an (a)-(b)-(c) zig-zag with a triangle in the middle. According to the Elliott Wave Principle, triangles precede the last wave of the sequence. Therefore, once wave (b) was over, another leg to the south should have been expected to drag the pound towards 1.2300 or lower in wave (c). However, to avoid being stopped out prematurely, we decided to stay bearish as long as 1.2706 remained intact. As it turned out, there was no need for such precaution measures, anyway.
Wave “e” of (b) did not even manage to approach the upper line of the pattern. The bears’ ambitions were so strong that they took the support near 1.2380 almost right away and continued imperturbably towards out first target of 1.2300. Once there, they decided to try and go for the next round figure at 1.2200. And nearly succeeded.
So instead of focusing your attention on Brexit, Article 50, Theresa May and so on, you should look at things from a different perspective. The Elliott Wave perspective. We can help.