Technical Analysis GBP USD Adam Smith Associates



Here is a big picture possibility with the Pound. For a while I have been clear that the dollar topped and that the Yen and Euro would go up. But the Pound was the outlier. It was forming a triangle as in a 4th wave. But now that prices have moved the other way. I wonder if the GBP is also going to rise on the dollar. That puts the trend into stone then. The dollar goes down against all the AE[advanced economy] currencies. This is a monthly chart from 1980 and you see that the recent low was at the parallel channel of the tops. So the only reason to not consider a bottom was that C=A was not achieved in the last 2 years decline. But that is not necessary. It is possible that wave C completed 5 waves as shown in the second chart below. If true we are at a multi year bottom in the GBP and it goes back to 2.15 against the dollar over 5 years. Yes Long term.



The second chart below shows the markings of 5 waves up for wave C for the USDGBP [inverse of the above GBPUSD]. Channels show how channel targets were met. If you remember my posts in 2015 I did mark the start of wave 3 as minor 1-2 subdividing. But later overlayed the monthly wave counts on the chart after the Brexit volatility. But it is not always that all time frames must match. So based on this weekly chart 5=1 was achieved at the new steeper channel target. Wave 3 subdivided and was 138.2% of wave 1. So good ratios. Prices have broken back into both the channels so it looks like a larger trend reversal is possible. I conclude that GBP EUR AND JPY are all going to be rising against the dollar. The dollar bulls will continue to get a rude awakening.



Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely of the author - Mr Rohit Srivastava - a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

Popular posts from this blog

4 Current Commodity Tips You Need to Know About

How Innovative Trade Finance Structures Can Remedy the Bad Loan Portfolios of Banks

5 Exciting Global Trends in Trade Finance