close icon

Long Term Elliott Wave Vision in GBPUSD

Do you remember, when GBPUSD reached 2.1159 in November 2007? Do you remember, when it fell to 1.3502 January 2009? Do you remember when it recovered to 1.7190 July 2014? Well, you better do, because these are the three key points, which paved the way for the crash we are currently witnessing. Wasn’t it Brexit, most would ask. When the British referendum results were announced, GBPUSD was trading slightly above 1.50. That is nearly 22 figures below the July 2014 top of 1.7190, which means Brexit is not the start of anything. It is merely a consequence of the downtrend, which has been in progress for over two years already. Or for over eight and a half years, depending on how you look at it.

On May 17th, 2014, we published “GBPUSD, Not As Optimistic As It Seems”. The chart below was included in this article. It shows why are the three above-mentioned key-levels so important.
5-gbpusd-big-pic
2.1159 is important, because it is the actual beginning of the multi-year downtrend, which is still in progress today. 1.3502 is important because it was the end of the first phase of the downtrend. The second phase, the recovery to 1.7190, was nothing more than a correction within the larger bear market. As technical analysis states, once a correction is over, the larger trend resumes. That is the reason why we were extremely bearish on GBPUSD over two years ago. As the forecast depicts, the bottom at 1.3502 was supposed to be breached in the long term. Today, July 6th, 2016, the pair fell to as low as 1.2794. Let’s see how the sell-off looks like on an updated chart.
gbpusd weekly 6.7.16
“At best, news is the tardy recognition of forces that have already been at work for some time and is startling only to those unaware of the trend.” Ralph Nelson Elliott said that. So, before saying that Brexit caused the Pound to plunge, consider the fact that the downtrend actually began in November 2007. Then, when you understand that this downtrend simply resumed in July 2014, you would come to realize Brexit did not cause anything. The natural law of the market did. The Elliott Wave Principle is the method we used to predict GBPUSD’s decline two years ago.
Now, wave counts should be changed and updated as often as the market inspires a better idea. That is why there are no labelings on the second chart of GBPUSD. The count we came up with in 2014 is no longer the best one. We have a new one, which looks much more probable. Hint: it is not looking good for the Sterling.

Prepare yourself for whatever is coming. Order your GBPUSD Elliott Wave analysis due out next Monday at our Premium Forecasts section. Stay ahead of the news in any market with the Elliott Wave principle.



Stay informed with our newsletter

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

Privacy policy
You may also like:

EURUSD Up 420 Pips in a Month as Uptrend Resumes

The inevitable seems to be happening to the U.S. dollar. After record-breaking liquidity injections by the Fed in response to the COVID-19 crisis, the greenback is weakening across the board. The U.S. dollar has recently been declining against its major rivals, including the Yen, the pound and the euro. EURUSD, the most traded Forex pair…

Read More »

GBPJPY Bears Aiming at 120, Before Giving Up

Whether it is because of Brexit or not, GBPJPY has been trading below 160.00 ever since the referendum in June 2016. The pair has been locked in a wide range between 156 and 124 for four years now. Last week, it closed the session at 134.66, down from 138.84 at the open. In order to…

Read More »

Elliott Wave Setup Helps EURUSD Add 325 Pips

EURUSD has been under pressure for over two years now. The pair reached 1.2556 in February 2018, but has been making lower lows and lower highs ever since. Yet, the past couple of weeks painted a different picture. Between May 18th and May 29th, the euro surged 325 pips against the U.S. dollar. In those…

Read More »

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…

Read More »

GBPUSD Aiming at 1.30, but May Tumble to 1.21 First

Not long ago, we shared our long-term view of GBPUSD. In our opinion, the down-phase of the pair’s cycle, which is in its 13th year now, is almost over. One last dip to 1.1000 is likely to be followed by a major bearish reversal and the start of the next up-phase. Now, we are going…

Read More »

British Pound ‘s 13-Year Downtrend Almost Over

The thirteen-year period between 2007 and 2020 started with the biggest crisis since the Great Depression and is about to end with the biggest crisis since the Great Depression. Between the two, the longest economic expansion on record took place. And while stock markets around the world reflected that recovery, some currencies have been in…

Read More »

Ahead of the Move: EURUSD Adds 500 Pips in a Week

At the start of last week EURUSD was trading below 1.0700. The pair had fallen from as high as 1.1496 in just two weeks as coronavirus cases in Western Europe kept climbing disturbingly fast. And while fundamental traders had every reason to expect more weakness, the charts were sending a different message. The Elliott Wave…

Read More »

More analyses