GBPUSD Weekly Elliot Wave analysis

GBPUSD is currently in a wave 3 or wave 5 of a long-term corrective wave C. We probably are at the begining of a wave 5 of that C corrective wave. So, for next week, I am projecting a bullish run up to 1.68 (161.8 fib extension of the last correction) and then the continuation of the big bearish trend, that will eventually take us below 1.35. If we’re in a wave 3 of C (though not likely), we may get a bigger bullish rally before we go down again (maybe up to 1.7320).

Taking into account that EURUSD has a strong correlation with both GBPUSD and EURJPY, we should expect the same iminent bearish continuation for both. But, as I said, next week we will probably witness a final bull rally, so I’m bullish on these pairs next week. If this is the case, then EURUSD may have a top near 1.4719 high of December 18th, 2008. So I expect a break of 1.4330 to the upside on the EURO and a break of 1.666 on the GBP. A possible top on EURJPY would most probably be 145.46 and I’d expect a break of the 139.21 high.

These highs could be taken out tuesday or wednesday, as we have a lot of important news coming out. So watch out for this and good luck!

S&P index is going up this morning and currently testing 885.15 resistance. Oil is also going to test 47.50 resistance. Asian and European equity markets rallied betting on the US automakers rescue.

I’m not pretty sure what will happen next and it’s hard to make a forecast at this moment, but I may be buying EURUSD at 1.3500 key resistance area and EURGBP at 0.9000. I’m pretty sure we will see parity on EUR and GBP, so 1.0000 soon.

I will probably also sell a breakout on USDJPY at the 90.50 support area.

I guess we’ll just wait and see what happens

Update: Oil just broke 47.50, M30 candle closed above and it’s using it as support. So we may see an EURUSD bull rally too. That encourages me to buy a breakout of 1.3500 and sell the USDJPY breakout of 90.50. S&P index is going down though, so I’m still not sure about what to expect.