Weekly Waves 26 June: GBP/USD, US30 and Bitcoin

Our weekly Elliott Wave analysis reviews the GBP/USD 4 hour chart, the Bitcoin crypto currency 4 hour chart, and the US30 daily chart.

GBP/USD Bullish Price Swing in Wave 4?

The GBP/USD has made a 500 pip bullish price swing. But despite the large move up, price action is technically still in a downtrend. Let’s review:

1. The GBP/USD broke below the round level of 1.20 but the bulls regained control quickly and unexpectedly.
2. The bullish price swing however seems to consist of an internal ABC pattern (yellow) within the wave A (green).
3. Our Elliott Wave analysis therefore favors a bearish ABC (yellow) within the wave B (green).
4. The wave B (green) could go to the 78.6%, 88.6% or even previous bottom (100%).
5. A larger bullish ABC (green) correction could complete a wave 4 (pink). This remains valid as long as price action stays below the bottom of wave 1.
6. A break above the 1.2475-1.25 resistance zone would indicate a potential trend reversal or retracement.
7. A new downtrend could aim for targets at 1.1850, 1.1750, 1.1650, and 1.15.

BTC/USD Struggles to Find Bullish Legs?

Bitcoin (BTC/USD) has reached the -27.2% Fibonacci target around the round psychological level of $20,000. Let’s review what is next for the main crypto currency:

1. The BTC/USD is trying to build a bullish retracement but the price action remains hesitant to pull away from the 20k area.
2. It seems though that price action will be completing a bullish ABC (green) within a wave 4 (pink) choppy correction.
3. The most logical target for the wave C (green) of wave (pink) is the 38.2% Fibonacci retracement level but sometimes price action can retrace deeper.
4. A bullish break above the trend line (orange) and 78.6% Fibonacci level makes the current bearish Elliott Wave analysis unlikely and invalidate.
5. A bullish correction that is choppy and lengthy is typical for a wave 4 and would confirm this expected wave pattern.
6. The bearish target for the wave 5 (pink) of wave 5 (gray) of wave A (purple) is around $17,500. A larger wave B pattern could emerge of a larger ABC once the wave A is completed.

US30 Large Whipsaw but Bearish Remain in Control

The US30 made a strong bullish bounce at the 23.6% Fibonacci retracement level:

1. The US30 bullish bounce could indicate a potential larger bullish correction.
2. Price action, however, remains in a downtrend and the bullish bounce is probably a retracement.
3. The bearish correction has probably completed a wave A or W (pink) of a larger ABC or WXY (pink) correction.
4. If price action places a higher low, then a bullish ABC (green) within wave B or X (pink) could see price action move towards the resistance trend lines (orange).
5. A bearish bounce and downtrend continuation is expected to emerge within a large and complex wave 4 (blue).

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter.