The Pound beats the Dollar? GBPUSD - 18th Feb 2025

Trend

GBPUSD Uptrend / Elliot Wave Count

• The GBPUSD is in a current uptrend which is confirmed by several trendlines all hitting 2 troughs within the rallies.

• The uptrend is also confirmed by RSI and MACD which both confirm the price action movement with no signs of divergence.

• The positive line on the ADX indicator is showing some signs of weakness, however based on the price action on the lower timeframe indicates a short-term reversal could be at play before the uptrend is resumed.

Price Action / Chart Patterns

1 Hour Chart View

Alternative view which forecasts a short rally up.

• There’s a potential 5 wave impulse developing with price currently in the 3rd of the 3rd wave.

• Utilising the Fibonacci Extension price could be heading towards the 1.236 area at $1.2780.

• A short term is anticipated as the lower degree impulse wave trendline is being broken with the 4th wave development at the micro degree. This is not a significant break as the rally was sharp and so an imminent break of the trendline was expected. With the larger degree trendline still intact it is to be assumed that the uptrend is still in play.

• There is also a divergence across all oscillators adding more evidence that the 4th wave correction on the 1H chart is in play.

• There is an alternative count which assumes that the overall price action / pattern is a larger time frame correction. The rally has been restricted within a channel which can be a characteristic of corrections vs strong impulse rallies where price breaks out of diagonal channels.

• There is also a resistance level at 1.28 which coincides with 1 fib (correction target). Price could be drawn to this level at which point it reverses and resumes the previous downtrend. See alternative count.

• The 1.28 level is inline with the 1.236 count on the main impulse count. Be wary of the impulse failing at this point.

Directional Bias

• Bullish bias on all counts with a potential reversal at 1.28 level.

Trade Plan

• Entry points - 1.2635 (break off current high).

• SL – 1.2675 (current support level).

• TP – 1.27 (target may be limited due to the degree price is currently at).

• May be best to wait for larger degree correction and entering that 5th wave.

• The above is best on current price action and will be subject to change depending on future developments.