The $EURGBP Longer Term Cycles & Elliott Wave

Firstly as seen on the monthly chart below there is data back to January 1975 in the pair. The EUR part being derived from the German Deutsche Mark up until the point EURUSD currency existed.

Secondly as seen on the monthly chart below I will describe how I think the pair has risen thus far & what can be seen in the future. You can see the bounce from the February 1981 lows appears to be 3 swings to the November 1995 highs. There are usually a few counts that can be valid. This move appears to be a double three. I prefer to use momentum indicators to show when a cycle ends from any point in time. Whenever a proposed wave two, B, X or wave four of any degree has been taken by the momentum indicator it is likely it has ended that cycle whether it is up or down.

The analysis continues below the monthly chart.

From the November 1995 highs the pair declined hard enough to the May 2000 lows to suggest it was correcting the cycle from the February 1981 lows. Up from the May 2000 lows it made another high in December 2008. From there it declined until July 2015 hard enough to suggest it was correcting the cycle up from the February 1981 low again. That suggests the move from the February 1981 low to the December 2008 high was of three swings. The aforementioned December 2008 to July 2015 lows move appears to have been another typical three swings.

The analysis and Elliott Wave part of this continues below the weekly chart.

Thirdly and in conclusion. From the July 2015 lows it made a relatively clean five waves impulse higher to the August 2017 highs. From there the pair traded sideways to lower until it made another 5 waves up to the August 2019 highs. That finished an expanded flat ((B)) structure. Then so much for the old rule of alternation, the decline to the December 2019 lows was five waves. This also completed a larger degree expanded flat b. The pair should be bullish in the larger degree while above there. While above there  expect the pair continues higher above the December 2008 highs.

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Kind regards & good luck trading. Lewis Jones of the ElliottWave-Forecast.com Team

Pound sterling continues to gain against other major currencies as the risk of a hard Brexit is now off-table. Last week, the currency also got a boost after Bank of England ruled out negative interest rate anytime soon. The Brexit issue has dominated the past few years. However, Pound Sterling now may finally start to react to domestic drivers on the economy and monetary policy.

The currency further gained support due to the optimism of UK’s vaccination programme. UK is one of the first countries which starts a vaccination program in a race to contain the more contagious variant of coronavirus. The government aims to vaccinate 15 million people by mid February and millions more by spring. Then by autumn, the rest of the adult population will receive vaccination.

With vaccines being rolled out at an accelerating pace and the expectations that there will be easing on the lockdown from March, the likelihood of interest rate cut and negative interest rate has dropped. Pound Sterling is expected to find support as the UK economy recovers in Spring and Bank of England steps further away from cutting interest rates.

EURGBP Daily Chart

Daily chart of EURGBP above shows that the pair has broken below the trend line support from 4.30.2020 low. In addition, it shows an incomplete bearish sequence from 9.11.2020 high and 12.11.2020 high, calling for more downside. A 100% – 161.8% extension from 9.11.2020 peak calls for a move lower towards 0.8538 – 0.8801. Another possible target is a 100% – 161.8% extension from 12.11.2020 peak which calls for a move lower to 0.8608 – 0.879.

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In this technical blog, we are going to take a look at the past performance of EURGBP 4-Hour Elliott wave Charts that we presented to our members. In which, the rally from April 2020 low showed an impulse structure with the bullish sequence tag called for more upside to take place. Therefore, our members knew that buying the dips into the direction of the bullish tag remained the preferred path. We will explain the Elliott wave structure & buying opportunity our members took below:

EURGBP 4 Hour Elliott Wave Chart

Above is the 4 Hour Elliott Wave Chart from 8/27/2020 update, in which the pullback to 86.71 low ended wave ((2)). Up from there, the rally higher in wave (1) of ((3)) took place as a 5 wave impulse sequence where wave 1 ended at 0.8814 high. Wave 2 ended at 0.8689 low, wave 3 ended at 0.9054 high, wave 4 ended at 0.8862 low, and wave 5 ended at 0.9175 high.

Down from there, the pair made a pullback in wave (2) to correct the cycle from 4/30/2020 low (0.8671). The internals of that pullback unfolded as a zigzag structure where wave A ended at 0.8936 low. Wave B ended at 0.9148 high and wave C was expected to reach 0.8910- 0.8763 100%-161.8% Fibonacci extension area of A-B. Then from there, the pair was expected to provide buying opportunity to our members into the direction of bullish tag looking for new highs or for minimum 3 wave reaction higher at least.

EURGBP Latest 4 Hour Elliott Wave Chart

Here’s the latest 4 hour Elliott Wave Chart from 9/08/2020 update. In which pair managed to reach the blue box at 0.8910- 0.8763 area and rallying higher. Allowed our members to create a risk-free position shortly after taking the long position at the blue box area. However, a break above 0.9175 high still needed to confirm the next extension higher. It’s important to note that with further market data, we re-adjusted the count of the pullback as a double three structure.

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