Top trade idea for March 22nd, 2016 – GBP/USD
By Gregor Horvat on Mar 22, 2016 04:28:53 GMT
GBPUSD has turned up in the last few weeks with very sharp price action which we see it as wave IV within big impulsive dowtrend. Fourth waves will typically retrace back to the area of a former wave four, and also for around 38.2% compared to wave three. Well, we can see this around that area, plus there is also a swing low of 1.4565 since 2015 that can also turn into a resistance. So if we put all into one context then 1.4600 can be very interesting new reversal zone, so be aware of a resumption of a bearish trend in days ahead.
On the lower time frame, GBPUSD recovered sharply last week after a nice turn up from 1.4050 level where we called end of an expanded flat correction. It was a perfect textbook pattern within ongoing recovery in wave IV. Well notice that pair is turning down now after it touched some important Fibonacci resistance levels for wave C-circled. In fact, pair is already beneath the swing low of a blue wave A that is first indication of a top in place. For now we see this decline as red wave 1), that can in seasons ahead encounter a pullback in wave 2), from where we would look for short opportunities.
About Gregor Horvat
Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/ Try EW-Forecast.com’s Services Free For 7 Days at http://www.ew-forecast.com/service
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