GBPUSD 31st December, 2013

On Tuesday`s session the pound unfolded towards the upside confirming the main count and the specified target is yet to be reached.

We are updating the main count according to the latest price action and it should be noted that from an analytical point of view, wave v pink is considered quite mature and we will touch upon that point in the last part of today`s analysis.

Main Hourly Count

– Invalidation Point: 1.6457
– Confirmation Point: 1.6579
– Upwards Target : 1.6619
– Wave number: v pink
– Wave structure: Motive
– Wave pattern: Ending Diagonal

Elliott Wave chart analysis for the GBPUSD for 31st December, 2013. Please click on the charts below to enlarge.

Main Daily Wave Count

01-gbpusd31dec13daily

This count expects that wave 4 maroon has more to offer towards the upside and that wave v pink is underway.

Within wave (E) black wave A blue unfolded as an impulse labeled waves i through v pink.

Wave i pink unfolded as a leading diagonal labeled waves (i) through (v) green.

Wave B blue unfolded as a flat correction labeled waves a, b and c pink with wave c pink unfolding as an impulse labeled waves (i) through (v) green.

Within wave C blue waves i through iv pink are expected complete and wave v pink is underway.

Wave iii pink unfolded as an impulse labeled waves (i) through (v) green and this count expects that wave iv pink is complete as a triple zigzag and that wave v pink is starting to unfold towards the upside.

This count expects wave v pink to be unfolding towards the upside as an ending diagonal.

As far as Japanese candlesticks study goes, the presence of a “Three White Soldiers” formation augments the main count`s view that further upwards movement is expected.

This count would be confirmed by movement above 1.6579.

At 1.6619 wave (v) green within wave v pink will reach 0.618 the length of wave (iii) green.

This count would be invalidated by movement below 1.6219 as within wave v pink no second wave may retrace more than 100 % the length of the first wave.

Main Hourly Wave Count

02-gbpusd31dec13hourly

02-gbpusd31dec13hourlymacd

This count expects that wave C blue is unfolding towards the upside.

Wave C blue is unfolding as an impulse labeled waves i through v pink with waves i through iv pink complete and wave v pink is unfolding towards the upside.

Wave iv pink unfolded as a triple zigzag labeled waves (w), (x), (y), (x) and (z) green.

Wave (w) green unfolded as a zigzag labeled waves a, b and c orange.

The first wave (x) green unfolded as a zigzag labeled waves a, b and c orange.

Wave (y) green unfolded as a zigzag labeled waves a, b and c orange.

The second wave (x) green unfolded as a zigzag labeled waves a, b and c orange.

Wave (z) green unfolded as a zigzag labeled waves a, b and c orange.

Following the completion of wave iv pink wave v pink is expected to be unfolding as an ending diagonal labeled waves (i) through (v) green with waves (i) through (iv) green complete and wave (v) green is underway.

Wave (iii) green unfolded as a zigzag labeled waves a, b and c orange and it should be noted that wave (iii) green was 3 pips shorter than wave (i) green.

As far as MACD study goes, so far the divergence between the end of wave (iii) green and the current top of wave (v) green is yet to be confirmed, however the current state of MACD readings suggests that a fifth wave is underway which agrees with the main count view.

This count would be confirmed by movement above 1.6579.

At 1.6619 wave (v) green will reach 0.618 the length of wave (iii) green.

This count would be invalidated by movement below 1.6457 as within wave (v) green no b wave may retrace more than 100 % the length of an A wave.

Food For Thought: From an analytical point of view wave (v) green might be considered complete as wave (v) green has already created a new high above the end of wave (iii) green and it was accompanied by a MACD divergence, however wave (v) green failed to reach the line connecting waves (i) and (iii) green but that is not uncommon for fifth waves to fail to reach that line, therefore we will be entertaining the possibility of a completed wave (v) green by movement below 1.6457 since the structure within wave (v) green is quite unclear at this stage.

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