GBPUSD Elliott Wave Analysis | Trading Lounge
British Pound/ U.S. Dollar (GBPUSD) – Day Chart

GBPUSD Elliott Wave Technical Analysis
FUNCTION: Bullish Trend
MODE: Impulsive
STRUCTURE: Navy Blue Wave 3
POSITION: Gray Wave 1
DIRECTION NEXT HIGHER DEGREES: Navy Blue Wave 3 (Initiated)
DETAILS: Navy Blue Wave 2 appears complete. Navy Blue Wave 3 is underway.
Invalidation Level: 1.31425

The daily chart presents a distinctly bullish scenario for GBPUSD, showcasing strong impulsive characteristics in its current Elliott Wave configuration. This setup places the developing navy blue wave 3 within the broader gray wave 1, signaling the completion of the corrective navy blue wave 2 and the start of a potential long-lasting bullish impulse. This suggests GBPUSD has entered the most aggressive stage of its upward cycle.

Wave analysis confirms navy blue wave 2 has concluded, transitioning into a driving upward wave 3. The impulsive momentum indicates robust institutional interest and potential for sustained gains. Traders should watch the key invalidation level at 1.31425, as a move below this point would nullify the current wave count and could imply a deeper correction or a revised wave structure.

This technical outlook positions GBPUSD in what is typically the most profitable phase of an impulse sequence—wave three. For trend-following traders, this wave often yields the strongest and longest price movements. As the bullish trend progresses, traders should monitor for continuation signals while adjusting risk management strategies appropriately. The analysis supports a longer-term bullish stance while recognizing 1.31425 as a pivotal risk level.

British Pound/ U.S. Dollar (GBPUSD) – 4-Hour Chart

GBPUSD Elliott Wave Technical Analysis
FUNCTION: Bullish Trend
MODE: Impulsive
STRUCTURE: Orange Wave 1
POSITION: Navy Blue Wave 3
DIRECTION NEXT LOWER DEGREES: Orange Wave 2
DETAILS: Navy Blue Wave 2 appears completed. Orange Wave 1 of 3 is now in play.
Invalidation Level: 1.31425

The 4-hour chart analysis indicates strong bullish momentum in GBPUSD as it initiates a fresh impulsive wave sequence. The current setup highlights the emergence of orange wave one within a broader bullish structure identified as navy blue wave three. This signals the completion of navy blue wave two’s corrective phase and the beginning of a significant upward push.

Confirmation of navy blue wave two’s conclusion supports the unfolding of orange wave one, marked by impulsive price action and strong market demand. This current phase holds considerable potential for further gains. A key technical invalidation level is placed at 1.31425—if breached, the wave count would be invalidated, suggesting either a complex correction or a trend shift.

This wave structure offers valuable insight for traders navigating this early stage of a potential strong rally. The likely follow-up to orange wave one will be orange wave two—a corrective phase that may create renewed entry opportunities. Traders should remain watchful of price continuation signals while managing risk accordingly. The bullish framework suggests GBPUSD is well-positioned to climb higher in the near term.

Technical Analyst: Malik Awais

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