GBPUSD – 3rd February, 2014 – Monthly

The pound started this month by moving towards the upside proving that wave 4 maroon had more to offer towards the upside before reversing directions sharply towards the downside.

We are updating the main count according to the latest price action and as well adding an alternate count which expects corrective downwards movement before reversing directions and moving towards the upside.

Main Daily Count

– Invalidation Point: 1.6662
– Confirmation Point: 1.6257
– Downwards Target : 1.6240
– Wave number: (iii) green
– Wave structure: Motive
– Wave pattern: Impulse

Elliott Wave chart analysis for the GBPUSD for 2nd January, 2014. Please click on the charts below to enlarge.

Main Weekly Wave Count

01-gbpusd03feb14monthly

01-gbpusd03feb14monthlymacd

This count expects that waves 1 through 3 maroon are complete and that wave 4 maroon is likely complete as a triangle in a sideways manner.

Wave 3 maroon extended into waves (1) through (5) black.

Wave 4 maroon unfolded as a triangle labeled waves (A) through (E) black.

Wave (A) black unfolded towards the upside as a zigzag labeled waves A, B and C blue.

Wave (B) black unfolded towards the downside as a zigzag labeled waves A, B and C blue with wave C blue unfolding as a clear five wave structure labeled waves i through v pink.

Wave (C) black unfolded towards the upside as a zigzag labeled waves A, B and C blue.

Wave (D) black unfolded towards the downside as a double zigzag labeled waves W, X and Y blue with wave W blue unfolding as a zigzag labeled waves a, b and c pink with wave a pink unfolding as a leading diagonal labeled waves (i) through (v) green and wave X blue unfolded as a zigzag labeled waves a, b and c pink. Wave Y blue unfolded as a zigzag labeled waves a, b and c pink.

Wave (E) black unfolded towards the upside as a zigzag labeled waves A, B and C blue and this count expects that wave 5 maroon is starting to unfold towards the downside.

As far as MACD study goes, the presence of a hidden divergence between the end of wave (C) black and the end of wave (E) black increases the confidence in the main count and suggests that a downtrend reversal is underway.

As far as Japanese candlesticks study goes, the presence of two inverted hammers by the end of January increases the confidence in the main count and suggests that the uptrend is quite mature.

This count would be initially confirmed by movement below 1.5854 and the final confirmation point is at 1.4813.

We will be able to specify targets within wave 5 maroon once wave 5 maroon starts to subdivide towards the downside.

This count would be invalidated by movement above 1.6747 as wave (E) black may not exceed the end of wave (C) black within a contracting triangle and it is worth mentioning that the invalidation point will be moved to the end of wave (E) black once we have confirmation on the weekly chart that wave 5 maroon is starting to unfold towards the downside.

Main Daily Wave Count

01-gbpusd03feb14daily

This count expects that wave 4 maroon is likely complete and that wave 5 maroon is starting to unfold towards the downside.

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.

Wave C blue unfolded as an ending diagonal labeled waves i through v pink.

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

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

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

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

Within wave 5 maroon this count expects that waves (i) and (ii) green are complete and that wave (iii) green is at its late stages.

This count would be confirmed by movement below 1.6257.

The next logical target for the completion of wave (iii) green is at 1.6241 as at that level wave (iii) green will reach 200 % the length of wave (i) green.

This count would be invalidated by movement above 1.6626 as within wave (iii) green no second wave may retrace more than 100 % the length of the first wave.

Alternate Weekly Wave Count

02-gbpusd03feb14monthlyalt

The alternate weekly count expects that the upwards movement from the start of 2009 is corrective in nature labeled wave B maroon.

Wave B maroon is unfolding as a double zigzag labeled waves (W), (X) and (Y) black with wave (W) black complete and wave (X) black is at its late stages.

Wave (W) black unfolded as a zigzag labeled waves A, B and C blue.

Wave (X) black is unfolding as a triangle labeled waves A through E blue with waves A through D blue complete and wave E blue is starting to unfold towards the downside.

This count would be confirmed by movement below 1.5854.

At 1.5475 Wave E blue will reach 0.618 the length of wave C blue.

This count would be invalidated by movement above 1.6747 as wave D blue may not exceed the end of wave B blue within a contracting triangle and it should be noted that the invalidation point will be moved to the end of wave D blue once we have confirmation on the weekly chart that wave E blue is underway. As well this count would be invalidated by movement below 1.4813 as wave E blue may not exceed the end of wave C blue within a contracting triangle.

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