GBPUSD 21st February, 2014

On ًFriday`s session the pound unfolded in a corrective manner, reaching the first specified target and ending its upwards movement in the middle of the specified target zone. However, the pound unfolded towards the downside first proving that the corrective wave we have been tracking unfolded as an expanded flat correction.

We are updating the main count according to the latest price action adding tight invalidation point and targets and as well adding an alternate count which expects the pound to unfold towards the upside.

As always we will use each count`s invalidation point to confirm the other count.

Main Hourly Count

– Invalidation Point: 1.6252 — 1.6726
– Confirmation Point: 1.6612
– Downwards Targets : 1.6605 — 1.6538 — 1.6471
– Wave number: (ii) green
– Wave structure: Corrective
– Wave pattern: Zigzag

Elliott Wave chart analysis for the GBPUSD for 21st February, 2014. Please click on the charts below to enlarge.

Main Daily Wave Count

01-gbpusd21feb14daily

01-gbpusd21feb14dailymacd

This count expects that wave B maroon is unfolding as a triangle labeled waves (A) through (E) black with waves (A) and (B) black complete and wave (C) black is unfolding towards the upside.

Wave (C) black is unfolding towards the upside as a zigzag labeled waves A, B and C blue with waves A and B blue complete and wave C blue is underway.

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 iii pink unfolded as an impulse labeled waves (i) through (v) green.

Wave (iii) green unfolded as an impulse labeled waves i through v orange with wave iii orange unfolding as an impulse labeled waves 1 through 5 purple.

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

Wave iv pink unfolded as a zigzag labeled waves (a), (b) and (c) green.

Wave v pink is unfolding towards the upside likely as an ending diagonal with wave (i) green complete and wave (ii) green is unfolding towards the downside.

As far as MACD study goes, the recent price high failed to register a new high on MACD suggesting that the recent upwards movement is not accompanied with enough momentum and thus creating a divergence which is typical of a fifth wave.

This count would be confirmed by movement below 1.6612.

At 1.6605 wave (ii) green will reach 0.382 the length of wave (i) green and at 1.6538 wave (ii) green will reach 50 % the length of wave (i) green and at 1.6471 wave (ii) green will reach 0.618 the length of wave (i) green, however it should be noted that the third target has lower probabilities and that the second target has highest probabilities.

This count would be invalidated by movement above 1.6823 as within wave (ii) green wave b orange may not retrace more than 100 % the length of an wave a orange and as well this count would be invalidated by movement below 1.6252 as wave (ii) green may not retrace more than 100 % the length of wave (i) green.

Main Hourly Wave Count

02-gbpusd21feb14hourly

This count expects that wave v pink is unfolding towards the upside as an ending diagonal labeled waves (i) through (v) green with wave (i) green complete and wave (ii) green is underway.

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

Wave a orange unfolded as an impulse labeled waves 1 through 5 purple with wave 3 purple unfolding as an impulse labeled waves (1) through (5) aqua.

Wave c orange unfolded as an impulse labeled waves 1 through 5 purple.

Wave 3 purple unfolded as an impulse labeled waves (1) through (5) aqua.

Wave 5 purple unfolded as an impulse labeled waves (1) through (5) aqua.

Within wave (ii) green waves a and b orange are expected complete and wave c orange is unfolding towards the downside. Wave a orange unfolding as a leading diagonal labeled waves 1 through 5 purple and wave b orange unfolding as an expanded flat correction labeled waves A, B and C purple.

This count would be confirmed by movement below 1.6612.

At 1.6605 wave (ii) green will reach 0.382 the length of wave (i) green and at 1.6538 wave (ii) green will reach 50 % the length of wave (i) green and at 1.6471 wave (ii) green will reach 0.618 the length of wave (i) green, however it should be noted that the third target has lower probabilities and that the second target has highest probabilities.

This count would be invalidated by movement above 1.6726 as within wave c orange no second wave may retrace more than 100 % the length of the first wave and as well this count would be invalidated by movement below 1.6252 as wave (ii) green may not retrace more than 100 % the length of wave (i) green.

Alternate Hourly Wave Count

03-gbpusd21feb14hourlyalt

P.S.: This count is presented on an 8 hours chart for clarification purposes.

This count expects that wave (ii) green is complete and that wave (iii) green is starting to unfold towards the upside.

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

This count would be initially confirmed by movement above 1.6726 and the final confirmation point is at 1.6823.

At 1.6873 wave v pink will reach equality with wave i pink.

This count would be invalidated by movement above 1.7043 as wave (C) black may not exceed the end of wave (E) black within a contracting triangle, as well this count would be invalidated by movement below 1.6612 as within wave a orange within wave (iii) green no second wave may retrace more than 100 % the length of the first wave.

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