Elliott wave analysis of Gold for May 18, 2021

GBP/USD rallied after ending its minor decline. The bias was bullish despite the temporary correction, so the pair was expected to come back higher. It's traded at 1.4168 level below 1.4177 resistance area.

The Pound remains very strong, some positive data reported today and tomorrow from the UK should boost the GBP. UK's Unemployment Rate is expected to remain steady at 4.9%, the Claimant Count Change could increase from 10.1K to 25.6K, while the Average Earnings Index may increase by 4.5%.

Furthermore, the UK inflation data will be released tomorrow. In line with expectations figures or better should lift the Pound.

GBP/USD Continuation or Reversal?

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GBP/USD edged higher after retesting the weekly pivot point (1.4083) and now is traded below the R1 (1.4173). Actually, the pair stands below a major confleunce area formed at the intersection between R1, 14177, with the second warning line (WL2) of the descending pitchfork.

Technically, a valid breakout through the confluence area indicates strong growth, while a false breakout or a reversal pattern printed here could announce a sell-off.

Forecast!

The bias is bullish, so an upside breakout is favored. Still, we have to wait for a valid breakout to validate a further upwards movement.

GBP/USD's failure to reach 1.4177 in its previous attempt signaled that the pair will come back and pressure it in the end. Jumping and stabilizing above 1.42 psychological level could confirm an upside movement towards fresh new highs.

The material has been provided by InstaForex Company - www.instaforex.com

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