GBPUSD 29th April, 2015

Cable unfolded as expected under the alternate count and target was reached and Cable continued moving towards the upside and upwards movement was characterized with a significant increase in momentum.

We will discuss the implication of this momentum increase in today`s alternate count which has equal probabilities as the main count.

Today`s alternate count setup is different as it anticipates two waves in advance instead of one wave in advance, this adds another layer of difficulty in the analysis process.

As always we will wait for either count`s confirmation point to be reached to determine the highly probable count.

Main Hourly Count

– Invalidation Points: 1.5053 — 1.5499
– Confirmation Point: 1.5261
– Downwards Targets: 1.5254
– Wave number: iv pink
– Wave structure: Corrective
– Wave pattern: Zigzag

Alternate Hourly Count

– Invalidation Points: 1.5261
– Confirmation Point: 1.5499
– Upwards Targets: 1.5541 — 1.5579
– Wave number: (v) green
– Wave structure: Motive
– Wave pattern: Impulse / Ending Diagonal

Elliott Wave chart analysis for the GBPUSD for 29th April, 2015. Please click on the charts below to enlarge.

Main Daily Wave Count

This count expects that primary wave B maroon is complete as a zigzag labeled intermediate waves (A), (B) and (C) black and that primary wave C maroon is unfolding towards the downside.

Within wave C maroon intermediate wave (1) black is likely complete as an impulse labeled minor waves 1 through 5 blue and intermediate wave (2) black has started unfolding towards the upside.

Wave 1 blue unfolded as a leading diagonal labeled minute waves i through v pink.

wave 2 blue unfolded as a zigzag structure labeled minute waves a, b and c pink.

Wave 3 blue unfolded as an impulse labeled minute waves i through v pink.

Wave 4 blue unfolded as a triangle labeled minute waves a through e pink.

As far as MACD study goes, We can see the start of a bearish divergence on the daily MACD as MACD is starting to register higher highs while price action did not follow suite.

This count would be initially confirmed by movement above 1.5499 and the final confirmation point is at 1.5553 .

At 1.5569 wave (2) black will reach 0.382 the length of wave (1) black and at 1.6189 wave (2) black will reach 0.618 the length of wave (1) black.

This count would be invalidated by movement above 1.7193 as wave (2) black may not retrace more than 100 % the length of wave (1) black. As well, this count would be invalidated by movement below 1.4566 as within wave A blue within wave (2) black no second wave may retrace more than 100 % the length of the first wave.

Main Hourly Wave Count

This count expects that minor wave (1) black is complete and that wave (2) black has started unfolding towards the upside.

Wave 5 blue unfolded as an impulse labeled waves i through v pink.

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

Within wave (2) black, it is expected that wave A blue is unfolding towards the upside as an impulse labeled waves i through v pink with waves i through iii pink likely complete and wave iv pink is underway.

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

Wave (i) green unfolded as an impulse labeled waves i through v orange.

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

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

Wave (iv) green unfolded as a double combination labeled waves w, x and y orange.

After the completion of wave i pink, wave ii pink unfolded as zigzag towards the downside labeled waves (a), (b) and (c) green.

Wave iii pink is probably complete as an impulse labeled waves (i) through (v) green.

Wave (iii) green was an extended third wave labeled waves i through v orange.

Within it, wave ii orange unfolded as a zigzag labeled waves A, B and C purple.

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

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

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

Wave (v) green unfolded as an impulse labeled waves i through v orange.

This count expects that wave iv pink has started unfolding towards the downside and this count would be confirmed by movement below 1.5261.

At 1.5254 wave iv pink will reach 0.382 of wave iii pink.

This count would be invalidated by movement below 1.5053 as wave iv pink may not enter price territory of wave i pink and as well this count would be invalidated by movement above 1.5499 as within wave iv pink no B wave may retrace more than 100 % the length of an A wave.

Alternate Hourly Wave Count

The difference between both main and alternate counts is within the subdivisions of wave iii pink. This count is suggested because MACD accompanied price and registered higher highs, this is not the typical behavior if a fifth wave was complete, but it is a typical behavior of a third wave being accompanied with the greatest momentum.

This count expects that wave iii pink is incomplete and that it has more to offer towards the upside.

Within wave iii pink waves (i) through (iii) green are highly likely complete and wave (iv) is unfolding towards the downside.

It is worth noting that wave (i) green was longer than wave (iii) green and therefore wave (v) green has to be shorter than wave (iii) green if this count is correct.

Q: So, if both counts expect a fourth wave being underway, what is the difference between both counts ?

A: The answer is “time”, wave iv pink of the main count is of higher degree and it is expected to last between 1-3 trading days to mature, while wave (iv) green of the alternate count is expected to be mature within the next 2-5 hours.

At 1.5378 wave (iv) green will reach 0.382 of wave (iii) green.

We should ask ourselves a simple question, what should we expect if Cable reversed directions and moved towards the upside and exceeded the confirmation point at 1.5499 ?

By movement above 1.5499, it would be expected that wave (v) green has started unfolding towards the upside and that wave (iv) green is complete.

At 1.5541 wave (v) green will reach 50 % of wave (iii) green and at 1.5579 wave (v) green will reach 0.618 of wave (iii) green.

This count would be invalidated by movement below 1.5261 as wave (iv) green may not enter the price territory of wave (i) green. It is worth mentioning that the invalidation point will be moved to the end of wave (iv) green once we have confirmation on the hourly chart that wave (v) green is unfolding towards the upside.

To summarize, This count expect a slight decline -if any-. That decline should respect the level of 1.5261. This count`s probabilities would increase when/if Cable reverse directions and move towards the upside above 1.5499.

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