In today's blog, we take a look at how GBPUSD entered the blue box area as it completed a pullback and rallied afterwards
As shown in the 1 hourly chart from July 19, 2021; GBPUSD rallied up from purple wave (a) lows, and completed the purple wave (b) at the peak on June 01, 2021. Within purple wave (b), we see a subdivision into 3 swings, labelled white a-b-c. White wave c unfolded as an ending diagonal.
Down from purple wave (b) peak, the pair shows four completed swings lower, pending the fifth swing to complete purple wave (c). The end of purple wave (c) simultaneously marks the end of green/minute wave x. Green wave x was expected to end somwhere within the blue box area, before the pair could rally for green wave y.
The chart below is from July 30, 2021. In it, we see that indeed the pair traded lower into the blue box to complete purple wave (c), thus green wave x; before a sharp impulse to the upside unfolded as anticipated.
The sharp impulse is proposed to be in the micro (blue) degree, and appeared to have completed 5 swings higher for white/subminutte wave i within purple (a) of green y. In other words, green wave y is expected to unfold as a purple (a)-(b)-(c) zigzag.
Currently, the pair is expected to correct lower in white wave ii before more upside can be seen. We would expect the pair to break above the peak or white wave i in order to confirm the next leg higher in white wave iii. Lest, it gives us a double correction or a larger correction lower in ii befor rallying higher. We prefer the long side on this pair, and shall be looking for dips for more long positions.
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