GBPUSD – One More Push Upwards

This week the pound unfolded as expected reaching and exceeding the first target by 8 pips before reversing directions and moving towards the upside.

As we discussed in the latest analysis, the pound continued to move towards the downside in a choppy manner with signs a hidden bullish divergence as we will soon discuss.

We are updating the main count according to the latest price action and as well presenting an alternate count which expects further downwards corrective movement.

As always we will let price action decide for us which count is the highly probable count by waiting for either count`s confirmation point to be reached.

6-Hours Main Count

– Invalidation Point: 1.6762 — 1.7043
– Confirmation Point: 1.6834
– Upwards Targets: 1.6849 – 1.6881
– Wave number: c orange
– Wave structure: Motive
– Wave pattern: Impulse/Ending diagonal

6-Hours Alternate Count

– Invalidation Point: 1.6834 — 1.6659
– Confirmation Point: 1.6762
– Downwards Target: 1.6746 — 1.7630
– Wave number: C purple
– Wave structure: Motive
– Wave pattern: Ending diagonal

Elliott Wave chart analysis for the GBPUSD for 25th April, 2014. Please click on the charts below to enlarge.

Main Wave Count

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.

Within wave (C) black waves A and B blue are complete and 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 double zigzag labeled waves (w), (x) and (y) green and this count expects that wave v pink is unfolding towards the upside.

Wave v pink is expected to be underway as an ending diagonal labeled waves (i) through (v) green with waves (i) and (ii) green complete and wave (iii) 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.

Wave b orange unfolded as a zigzag labeled waves A, B and C purple.

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

This count expects that wave (ii) green is highly likely complete as a zigzag labeled waves a, b and c orange.

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

Wave (iii) green is unfolding as a zigzag labeled waves a, b and c orange with waves a and b orange complete and wave c orange is unfolding towards the upside.

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

Wave b orange unfolded as a double combination labeled waves W, X and Y purple with each wave within that double combination unfolding as a three wave structure labeled waves (A), (B) and (C) aqua.

Within wave c orange, waves 1 and 2 purple are expected complete and wave 3 purple is unfolding towards the upside.

As far as MACD study goes, The presence of a hidden divergence between the ends of waves (ii) green and b orange within wave (iii) green supports the main count`s view.

This count would be confirmed by movement above 1.6834.

At 1.6849 wave 3 purple will reach equality with wave 1 purple and at 1.6881 wave (iii) green will reach 0.618 the length of wave (i) green.

This count would be invalidated by movement above 1.7043 as within a contracting triangle, wave (C) black may not exceed the end of wave (A) black, as well this count would be invalidated by movement below 1.6762 as wave 2 purple may not retrace more than 100 % the length of wave 1 purple and it should be noted that the invalidation point will be moved to the end of wave 2 purple once we have confirmation on the hourly chart that wave 3 purple is unfolding towards the upside.

Alternate Wave Count

The difference between both main and alternate counts is within the subdivisions of wave b orange as the subdivisions within wave b orange is not very clear, therefore we are presenting this alternate count which expects that wave b orange is incomplete and that wave C purple is unfolding towards the downside.

Wave C purple is likely unfolding as an ending diagonal labeled waves (1) through (5) aqua with waves (1) and (2) aqua complete and wave (3) aqua is unfolding towards the downside.

This count would be confirmed by movement below 1.6762.

At 1.6746 wave C purple will reach 1.382 the length of wave A purple and at 1.6730 wave C purple will reach 1.618 the length of wave A purple.

This count would be invalidated by movement above 1.6834 as within wave (3) aqua no B wave may retrace more than 100 % the length of an A wave, as well this count would be invalidated by movement below 1.6659 as wave b orange may not retrace more than 100 % the length of wave a orange.