GBPUSD Elliot Waves Analysis For 12 May 2016 | 12 May 2016

Wave Analysis

GBP/USD is currently trading with a bearish bias. Yesterday, the pair traded long but could not close above the descending channel. As long as the the pair trades within this channel we expect a momentum to the lower side but should not go below 1.4106. A clear break below 1.4406 will confirm the anticipated downward rally while a clear breakout above the descending channel will lead to an acceleration to the upper side with an ideal target at 1.4663. This pair should be traded alongside AUD/JPY, AUD/USD, GBP/JPY and EUR/JPY. These pairs have a strong positive correlation of up to +0.92 and will likely have a similar price action during this trading day.

Trade Recommendations:

If you are not short already, wait for a clear breakout below 1.4406 to go short with your target at the support level 1.43040. A clear breakout this support will call for further short positions with the next target at 1.4106. Only buy upon a clear break above the channel or upon a clear rebound from 1.44061. The long position should have a target at 1.46637.