Cycles in GBP/USD
Short term cycle
I have made some preliminary investigations on GBP/USD. The diagram below shows the various cycles up until today. As you can see we reached the peak of the most recent cycle 8 days ago and have since rolled over, particularly after yesterday’s below expectations GDP result. The other waves in the cycle have been marked with perforated dividers and their lengths written in days. It’s interesting how we are rolling over at about the time you would expect to by following the cycle.
The only slight problem is the large variation in wave-length as shown below in which I have included many more waves stretching back further:
There does seem to be an average ‘mean’ length of about 30 days or 6 weeks. There are a few outliers however such as the 56 day cycle at the Oct ’09 top and the small 19 day cycle in March ’10, but generally it works ok.
Possible 8-year cycle in GBP/USD
Below is a chart showing a possible 8-year cycle in cable. The cycle has a very variable amplitude but it has worked very well at timing market troughs since 1978.
This cycle suggests a sideways or bull market should follow at least for a few years anyway given the last cycle trough was in 2009 and the next is scheduled for 2017.
Research by:
Joaquin Monfort
Forex4you analyst
very interesting outlook on GBP/USD
im seeing personally a possible USD climb but also a GBP climb. It will be interesting which one will extend the furthest, but nonetheless i like your article
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Beautiful post, written in understandable and accessible to everyone.
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