Related Topics
Currencies , Trading

British Pound Gets Pounded: Will the Real Reason for the Fall Please Stand Up

See how Elliott wave patterns warned the pound was slated to fall before UK Prime Minister Boris Johnson "set up a cliff edge"

by Nico Isaac
Updated: December 19, 2019

On Monday December 16, the British pound plummeted 1.5% against the U.S. dollar for its largest single-day drop in a year. This was NOT a case of "Who done it"? According to every mainstream outlet from High Street to Wall Street, one man was sterling's own Ebenezer Scrooge: UK Prime Minister Boris Johnson.

The alleged offense: On December 16, Johnson announced plans to add a law to the Withdrawal Agreement Bill (a.k.a. Brexit) making it illegal to extend the time period allotted for the post-Brexit transition between Britain and the EU.

Johnson's revision, dubbed "reckless," a "stark reality check," and "manifesto" by a newly emboldened politician was universally cited as the catalyst for the pound's losses, as these news items confirm:

  • "GBP Sterling Plunges Against Euro and Dollar After Boris Johnson Gamble" (
  • "Boris Johnson Sends Pound Tumbling with Brexit Statement" (The Independent)
  • "Pound Slumps 1% As Boris Johnson Raises Fresh Risk of a No-Deal Brexit" (CNBC)

So -- blame Boris. Case closed. The timeline is clear: Johnson speaks, market falls. So would you believe me if I told you that the fall was set up three days earlier, and you could have seen it coming?

On December 13, our Currency Pro Service editor Jim Martens identified a completed five-wave rally on the British Pound/US Dollar's price chart. For newbies, here's an idealized diagram of the basic Elliott wave rally-correction sequence, 5 waves up and 3 waves down:


Now, here's Jim Martens' chart from the December 13 Currency Pro Service, which shows the five-wave move and his bearish forecast:

"The rally underway from 1.1959 is in its terminal stages.

"The completion of a five-wave rally will set the stage for the largest correction in over three months..."


On December 15, Currency Pro Service updated subscribers again via this chart:


And the pound's multi-day downturn followed, as Elliott waves predicted:


The reason why Elliott waves work is because they help you track investor psychology. You can see which way it's likely headed well before the news. Often, the news only serves as a convenient "explanation" for a market move that was in the cards... err, waves, long before.

The political horizon is certain to contain many more drastic shocks no one saw coming. But for Elliott wave traders, the horizon is filled with high-confidence setups, news or no news.

You Can Have a Team of Top, Elliott-Based FX Analysts Working FOR YOU

-- Around the Clock --

They will:

Scour the Most Popular Forex Pairs
Orient You to What's Coming Up
And Look the World Over for the Most Promising Elliott Wave Set-Ups
Before They Are On Anyone Else's Radar

Preparing You to Pounce on Opportunities and Ride Trends

Trading the forex markets is hard. Constantly surveying the world's currencies for pending moves around the clock is not easy. And even when you do spot what looks to be a perfect setup, staying unemotional becomes an internal battle for most traders.

But there is one way to help tip the odds in your favor. Hire an objective, experienced team of Forex analysts to go to work for you.

4 ways EWI's Forex Pro Service lets you trade with more confidence

If it's an important pair, you'll be on top of it

1. You Get Around the Clock Analysis for 11 Popular FX Pairs

Your Currency Pro Service subscription puts a team of Forex experts in your corner. Their goal is to make sure that day-by-day, hour-by-hour, you have the very latest Elliott wave forecasts for the FX markets that matter most -- whether you need it at 2am or 2pm. This intensive coverage includes 11 of the most popular dollar and cross rates:


2. You Get "Opportunity-Now!" Alerts

Your Pro Services Forex team scours the FX markets for dramatic set ups for you. Each is a market that has reached a low-risk, high-reward juncture in its wave pattern. You'll find them in the Opportunities section of your Pro Service portal.

3. You Get Essential Weekly Perspective

Once a week, your Forex analysts record a video to help you prepare for the week ahead. Sit back and watch as our analysts reveal the markets that are on their radar and that should be on yours. Then, each week market veteran Murray Gunn posts his Currency Insights column calling your attention to an over-looked but powerful wave-generated undercurrent moving the money markets. These videos and columns add up to unparalleled, essential perspective for all serious FX traders.

4. You Become Part of an Exclusive Community of Savvy Elliott Wave Traders

Our Forex team is your Forex team. If you have a question about the wave principle or our analysis, just send us an email. A team member will get back to you. If it makes sense for the answer to be shared with your Pro Service peers, we'll do so, confidentially of course. If you're having a hard time grasping an Elliott wave concept, our Educational Consultant will find the best resource for you and send it along. We know that we're successful when you are successful. We do everything in our power to make sure that happens.

Start Your Subscription Now

Personlize your FX Pro Service package to get the coverage you need.

Gold: Why You Should Be Wary of the “Consensus”

As train conductors of yesteryear used to say, “ALL aboard!” That’s a useful announcement for passengers, but not so much for investors. For example, consider investor sentiment toward gold. This chart shows you.

What REALLY Moves Bitcoin?

Some say, Bitcoin and the S&P 500 are joined at the hip. Some say, Bitcoin and U.S. dollar are inversely correlated. Some say… well, watch what the editor of our Crypto Pro Service thinks about all that first.

Any Liquid Market, Any Timeframe: Know How to Spot New Opportunities Today

This year, everyone from retirees to generation Z's have turned to online trading in hopes of earning money amidst economic uncertainty. But all too often, new traders focus too much on chasing opportunities at the expense of managing risk. Elliott Wave International's on-demand webinar -- "Introduction to Spotting Elliott Wave Trading Opportunities" can help you fill in this important gap. (FREE; $129 value)