This week the pound started the week by moving towards the upside as expected and the pound fell short of the specified target by 6 pips before reversing directions and moving towards the downside.
We are updating the main count according to the latest price action and we are adding an alternate count which expects an upwards corrective movement before resuming the downwards move.
As always we will wait for either count`s confirmation point to be reached to determine the highly probable count.
8-Hours Main Count
– Invalidation Point: 1.6419
– Confirmation Point: 1.6262
– Downwards Target : 1.6228
– Wave number: iii orange
– Wave structure: Motive
– Wave pattern: Impulse
8-Hours Alternate Count
– Invalidation Point: 1.6419 — 1.6262
– Confirmation Point: 1.6321
– Upwards Target : 1.6342
– Wave number: (iv) green
– Wave structure: Corrective
– Wave pattern: Zigzag
Elliott Wave chart analysis for the GBPUSD for 6th December, 2013. Please click on the charts below to enlarge.
Main Wave Count
This count explores the possibility of a completed wave 4 maroon and that wave 5 maroon has started and at its early stages.
Within wave (E) black wave C blue unfolded as an impulse labeled waves i through v pink.
Wave i pink unfolded as an impulse labeled waves (i) through (v) green.
Wave ii pink unfolded as a zigzag labeled waves (a), (b) and (c) green.
Wave iii pink unfolded as an impulse labeled waves (i) through (v) green with wave (iii) green unfolding as an impulse labeled waves i through v orange.
Wave iv pink unfolded as a zigzag labeled waves (a), (b) and (c) green.
Wave (c) green unfolded as an ending diagonal labeled waves i through v orange.
Following the completion of wave 4 maroon, this count expects that wave 5 maroon is at its early stages and within wave 5 maroon wave i pink is unfolding towards the downside as an impulse labeled waves (i) through (v) green with waves (i) and (ii) green complete and wave (iii) green is extending towards the downside.
Within wave (iii) green waves i and ii orange are complete and wave iii orange is underway.
As far as MACD study goes, MACD has followed price action and registered a new lower low and that is typical of a third wave represented by wave iii orange and for this count to be correct a divergence between MACD readings and price action is expected to occur as price action continue to make a new lower low to complete wave (v) green and therefore wave i pink.
This count would be confirmed by movement below 1.6262.
At 1.6228 wave iii orange will reach 1.618 the length of wave i orange.
This count`s invalidation point keeps is at 1.6419 as within wave iii orange no second wave may retrace more than 100 % the length of the first wave.
Alternate Wave Count
The difference between both main and alternate counts is within the subdivisions of wave i pink as the alternate count expects that wave i pink is unfolding towards the downside as an expanding leading diagonal.
Within wave i pink waves (i) through (iii) green are complete and wave (iv) green is starting to unfold towards the upside.
This count would be confirmed by movement above 1.6321.
Within an expanding leading diagonal wave (iv) green is expected to be longer than wave (ii) green and therefore at 1.6342 wave (iv) green will be 1 pip longer than wave (ii) green.
This count would be invalidated by movement above 1.6419 as wave (iv) green may not exceed the end of wave (ii) green within a leading diagonal and as well this count would be invalidated by movement below 1.6262 as within wave (iv) green no B wave may retrace more than 100 % the length of an A wave.