Today let us look at some cross pairs, GBP/AUD and GBP/NZD, and their positive correlation.

On both pairs, we can see a five-wave decline down from the highs, which in Elliott wave theory suggest where the bigger trend is going, and that a temporary pause (after five legs are completed) may follow within the bigger trend. On GBP/AUD we see a drop in five legs from the 1.888 area, towards the 1.755 region, where a sharp rise occurred. This rise can be part of a temporary pause within a downtrend, a wave 2 of a bearish cycle which can look for resistance near the 1.8200/1.8424 area.

Now on the GBP/NZD, we have a similar view for the upcoming weeks and months; after a visible five-wave drop from the 2.00 zone, we expect to see a three-wave setback for a wave 2, which can face resistance, and a bearish turn around the 1.906/1.940 region.

GBP/AUD, Daily

(Click on image to enlarge)

GBPNZD, Daily