GBPUSD 26th October, 2015

On Monday`s session, Cable unfolded in a tight range leaving both main and alternate counts valid.

We are updating both counts according to the latest price action and the main count expects that Cable is forming a series of first and second waves which in turn suggests that Cable should start a free fall within a third of a third wave. The alternate count on the other hand expects a corrective structure to be incomplete and that Cable has more to offer towards the upside.

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

Main Hourly Count

– Invalidation Point: 1.5420
– Confirmation Point: 1.5305
– Downwards Targets: 1.5281 — 1.5269 — 1.5195
– Wave number: 3 red
– Wave structure: Motive
– Wave pattern: Impulse

Alternate Hourly Count

– Invalidation Points: 1.5200 — 1.5658
– Confirmation Point: 1.5510
– Upwards Targets: 1.5539 — 1.5548
– Wave number: ii orange
– Wave structure: Corrective
– Wave pattern: Zigzag

Elliott Wave chart analysis for the GBPUSD for 26th October, 2015. Please click on the charts below to enlarge.

Main Daily Wave Count

This count expects that primary wave B maroon is complete and that primary wave C maroon is unfolding towards the downside.

Within wave C maroon intermediate wave (1) black is complete as an impulse labeled minor waves 1 through 5 blue and intermediate wave (2) black might be complete as well and that intermediate wave (3) black has started unfolding downwards.

Within wave (1) black, 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.

Intermediate wave (2) black unfolded as a zigzag labeled waves A, B and C blue.

Wave B blue unfolded as a zigzag labeled waves a, b and c pink.

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

Within intermediate wave (3) black it is expected that waves i and ii pink are complete and that wave iii pink is unfolding downwards.

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

Within wave iii pink it is likely that waves (i) and (ii) green are complete and wave (iii) green is at its early stages.

Within wave (iii) green it is likely that waves i and ii orange are complete and that wave iii orange is unfolding towards the downside.

This count would be confirmed by movement below 1.5107.

At 1.4992 wave iii pink will reach 1.382 of wave i pink which is the next logical target and at 1.4853 wave iii pink will reach 1.618 of wave i pink.

This count would be invalidated by movement above 1.5659 as within wave (iii) green no second wave may retrace more than 100 % of its first wave.

Main Hourly Wave Count

This count expects series of first and second waves forming on the hourly chart and that a third wave is around the corner.

Within wave (iii) green, waves i and ii orange are complete and wave iii orange is at its very early stages.

Wave i orange unfolded as an impulse labeled waves 1 through 5 purple with wave 5 purple unfolding as an ending diagonal labeled waves (1) through (5) aqua.

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

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

Wave B purple unfolded as an expanded flat correction labeled waves (A), (B) and (C) aqua.

Within wave iii orange it is likely that waves 1 and 2 purple are complete and that wave 3 purple is starting to extend downwards.

Within wave 3 purple it is expected that waves (1) and (2) aqua are complete and wave (3) aqua is underway with waves 1 and 2 red complete and wave 3 red is unfolding downwards.

This count would be confirmed by movement below 1.5305.

At 1.5281 wave (3) aqua would reach equality with wave (1) aqua. At 1.5269 wave 3 red would reach equality with wave 1 red and the final target is at 1.5195 wave (3) aqua would reach 1.618 of wave (1) aqua.

This count would be invalidated by movement above 1.5420 as wave 2 red may not retrace more than 100 % of wave 1 red and it should be noted that the invalidation point would be moved to the end of wave 2 red once we have confirmation on the hourly chart that wave 3 red is underway.

Alternate Hourly Wave Count

The only difference between both main and alternate counts is within the subdivisions within wave C purple.

This count expects that C purple is incomplete and that it has more to offer towards the upside.

Wave C purple is unfolding upwards as an ending diagonal with waves (1) and (2) aqua likely complete and wave (3) aqua is at its early stages.

Wave (2) aqua unfolded as a double zigzag labeled waves W, X and Y red.

This count would be confirmed by movement above 1.5510.

At 1.5539 wave ii orange would reach 0.786 of wave i orange and at 1.5548 wave (3) aqua would reach 0.786 of wave (1) aqua.

This count would be invalidated by movement above 1.5658 as wave ii orange may not retrace more than 100 % of wave i orange and as well this count would be invalidated by movement below 1.5200 as wave (2) aqua may not retrace more than 100 % of wave (1) aqua.

    Food For Thought:

Both main and alternate counts have higher probabilities than other counts. We will be discussing a third count on the weekly analysis which will be published shortly and we will go through the reasons why that third count is considered less probable than both main and alternate count.

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