Wednesday, November 2, 2016

Elliott Wave structure of the British Pound

The average life expectancy for a fiat currency is around 27 years, Approximately every 30-40 years the monetary system breaks down and needs to be redefined.

The British Pound Sterling also known as the pound (GBP) is so far the most successful reserve currency in the world and is the oldest currency still in use.

Prior to WWI, the United Kingdom had one of the world's strongest economies, holding 40% of the world's overseas investments. However, after the end of the war the country was very indebted and lost the reserve currency status to the US dollar.

See our comparison of the former reserve currencies of the world here.

Technical analysis of the British Pound Sterling.  Source: Elliott Wave Technician

GBP has been declining for about a decade. The Elliott Wave structure is a large A, B and C correction since 2007 marked in blue colour on the chart above.

Wave 'A' down ended in early 2009. A large sidewave correction that we have labeled as wave 'B' ended in the middle of 2014. Since then the GBP has been declining in wave 'C'.

GBP declining in wave ‘3’ of 'C' down. The decline will take the British Pound towards parity with the USD in a few years.

Geir Solem

Elliott Wave Technician
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