Analysis

Premium analysis by our dedicated team
GBPUSD
Jul 21, 2021, 1:03 PM GMT
#Forex

Temporary Break in GBPUSD's Downtrend

The GBPUSD is currently finding itself in a very strong downtrend whose development we have followed over the last couple of months. Part of the reason for the strengthening of the U.S. dollar has to do with the fact that the market has already priced in FED's inflationary policy.

The greenback is also likely to be bolstered this week with the beginning of the new earnings season in the U.S. That is so because a generally robust quarterly performance would boost global demand for U.S. stocks, which can be purchased in dollars.

Meanwhile, the sterling continues to reel from the worsening pandemic situation in the UK. The new delta variant of coronavirus could jeopardise the highly anticipated reopening of the country, which is exerting heavy pressure on the sterling.

Thus, the GBPUSD is likely to continue depreciating over the medium term. However, the pair could be due for a minor pullback following the massive slump recently. This can be utilised by bulls and bears alike.

The Last Impulse Leg of the Elliott Wave Pattern

As can be seen on the daily chart below, the new downtrend emerged following the completion of the massive Double Top. This signifies a very probable continuation of the downtrend's development over the next weeks.

Profit & Loss
Short Term Long Term Net % Gains
+ - + -
124 PIPS 0 Pending Pending
0.90%
Short Term
+ -
124 PIPS 0
Long Term
+ -
Pending Pending
Net % Gains
0.90%

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