GBPUSD – Preparing For A Decline

This week the pound unfolded as expected towards the upside and targets were reached and exceeded by 27 pips.

We are updating the main count according to the latest price action and this week`s main count expects Cable to reverse directions and move towards the downside in an impulsive manner while the alternate count expects the pound to continue moving towards the upside to complete wave (ii) green.

As always we will use each count`s confirmation point to determine the highly probable count.

6-Hours Main Count

– Invalidation Point: 1.6997
– Confirmation Point: 1.6731
– Downwards Targets: 1.6657 — 1.6493
– Wave number: (iii) green
– Wave structure: Motive
– Wave pattern: Impulse

6-Hours Alternate Count

– Invalidation Point: 1.6997 — 1.6731
– Confirmation Point: 1.6918
– Downwards Targets: 1.6939
– Wave number: (ii) green
– Wave structure: Corrective
– Wave pattern: Double zigzag

Elliott Wave chart analysis for the GBPUSD for 23rd May, 2014. Please click on the charts below to enlarge.

Main Wave Count

01-gbpusd23may14daily1

This count expects that wave (C) black is likely complete and that wave (D) black is at its very early stages.

Wave v pink unfolded as an ending diagonal labeled waves (i) through (v) green.

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.

Wave (ii) 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 (iii) green unfolded as a double zigzag labeled waves w, x and y orange.

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

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

Following the completion of wave (iv) green, wave (v) green unfolded as a zigzag labeled waves a, b and c orange.

Within wave (D) black, wave (i) green is complete and wave (ii) green is likely complete as well and wave (iii) green is starting to unfold towards the downside.

Within wave (i) green wave i orange unfolded as an impulse labeled waves 1 through 5 purple.

This count would be confirmed by movement below 1.6731.

At 1.6657 wave (iii) green will reach equality with wave (i) green and at 1.6493 wave (iii) green will reach 1.618 the length of wave (i) green.

This count would be invalidated by movement above 1.6923 as within wave (iii) green no second wave may retrace more than 100 % the length of the first wave.

Alternate Wave Count

02-gbpusd23may14daily1alt

This count expects that wave (ii) green is incomplete and that wave (ii) green has more to offer towards the upside.

Wave (ii) green is unfolding as a double zigzag labeled waves w, x and y orange with wave w orange complete and wave x orange is at its late stages.

This count would be confirmed by movement above 1.6918.

At 1.6939 wave (ii) green will reach 0.786 the length of wave (i) green.

This count would be invalidated by movement above 1.6997 as wave (ii) green may not retrace more than 100 % the length of wave (i) green and as well this count would be invalidated by movement below 1.6731 as wave x orange may not retrace more than 100 % the length of wave w orange.

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