The following is the technical analysis of GBPUSD ahead FOMC meeting based on 15 March Pre-FOMC GBPUSD Elliott wave analysis. Which technical levels should we watch out for for bearish continuation of bullish resumption?
15 March, AtoZForex – Today, we have the most important event for the week. The Fed meet to discuss U.S economic outlook. This event is so important to USD pairs as the talk of a probable rate hike escalates among traders, investors and analysts. The Cable had some wild moves yesterday as Article 50 was passed in the house of Lords on Monday. In our last weekly Elliott wave analysis, we had forecast an intraday bullish breakout with the chart below.
With the chart above, price completed the long awaited correction. A zigzag correction with an impulse wave (C). A break above 1.2200 was expected to take price higher. We speculated in the last update thus:
GBPUSD price moves in a range between 1.2200 and 1.2126. A break above 1.2200 could be enough for the bullish resumption. This will mean that the last leg of the zigzag bearish correction will have completed. A break below 1.2126 should be capable to take price further downside. A decisive break above 1.2200 should be the ideal setup for the bullish traders
The first day of this week witnessed the breakout rally and it seemed the bullish move had resumed. The following day witnessed a sharp fall amidst Article 50 Post-Brexit trigger. Price quickly recovered from this sharp fall. It doesn’t seem clear where the near-term direction of the Cable would be. The FOMC today is expected to cause some volatility as well. The chart below shows our latest view.
15 March Pre-FOMC GBPUSD Elliott wave analysis: what next?
Price could have completed the corrective pattern at 1.2105. With price ranging between 1.2250 and 1.2105, the FOMC could cause a breakout above 1.2250 or below 1.2105. If price breaks above 1.2250, we can expect the rally to continue throughout March and if below 1.2105, we can expect it to 1.195-1.197. Official talks on Brexit will start by the end of March, but before then, the levels we mentioned should be watched closely. More updates will come after the FOMC meeting.
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