The GBPUSD pair recently surged above its previous peak, indicating a strong bullish trend in the market. This upward movement confirms the higher high bullish sequence from the recent low in September 2022. The current rally from the April 2024 low appears to be following a 5-wave impulse pattern based on the Elliott Wave theory. The wave 1 of this impulse pattern ended at 1.3045, followed by a pullback in wave 2 that concluded at 1.266. The subsequent breakout above wave 1 suggests that wave 3 is currently underway.
Wave Count
Breaking down the recent price action, wave (i) ended at 1.277, with a temporary correction in wave (ii) that found support at 1.272. The pair then continued its upward movement, with wave i of the next higher degree concluding at 1.287. A shallow pullback in wave ii dipped to 1.2798 before the pair extended higher in wave iii towards 1.313. The subsequent corrective wave iv ended at 1.307, paving the way for the final leg of wave v to reach 1.323, completing wave (iii) of the larger impulse pattern.
Future Forecast
Looking ahead, the pair is expected to undergo a corrective phase in wave (iv) before embarking on one last leg higher to complete wave (v) of the current cycle. This completion will mark the end of wave ((i)), followed by a retracement in wave ((ii)) to correct the cycle from the low in August 2024. As long as the pivot at 1.266 remains intact, any dips in the exchange rate are likely to find support within a specific range, suggesting further upside potential in the near term.
Overall, the technical analysis points towards a bullish outlook for the GBPUSD exchange rate, with the potential for additional upside movement following the completion of the current wave cycle. Traders should keep a close eye on key support levels and price action developments to gauge the strength of the ongoing trend and potential entry points for profitable trades.