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Expect corrections to the upperside.

01 September 2016, GBP/USD

Expect corrections to the upperside.

Wave Analysis

The cable is currently trading with a declining bullish bias. We expect the current upward rally to be a mere correction of the larger impulsive wave E and should not go beyond the upper resistive trend line. Any clear breakout above the upper trend line may culminate into an extended corrective wave D. However, as long as the pair trades below the upper trend line, we expect a momentum to the lower side for the impulsive wave E to end along the lower trend line. Expect a similar correction in the other positively correlated pair GBP/HKD. Only go short in GBP/USD, if the other pair is giving the same signal.

Trade Recommendations:

If you are not short already, wait for a clear rebound from the upper trend line to go short with an ideal target along the lower trend line.

Graham Osano
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