Cable unfolded in a tight range and even though playing the wait game is getting harder by the moment, having a confirmation point in place saves us from entering the market and staying locked in a trade setup that turns out to be a sideways movement and being trapped in such a trade can have its toll on our behavior and more importantly, our judgement.
We are updating the main count according to the latest price action. The main count expects that Cable has more to offer towards the upside to complete a corrective structure before resuming its downtrend.
The last alternate count discussed on the 25th November analysis remains valid. Focusing on today`s hourly MACD reveals that MACD has been hovering around the zero line and the converging nature of the recent price action suggests that a triangle might be unfolding and that is the possibility that we are going to discuss in today`s alternate count and in the process we will touch upon how to calculate thrusts out of a triangle.
Both main and alternate hourly counts are presented on 2-hourly charts to view the complete structure within wave 3 purple.
As always we will wait for either counts confirmation point to be reached to determine the highly probable count.
Main Hourly Count
– Invalidation Point: 1.5336 — 1.5053
– Confirmation Point: 1.5156
– Upwards Target: 1.5155 — 1.5163 — 1.5195
– Wave number: 2 Lime
– Wave structure: Corrective
– Wave pattern: Flat
Alternate Hourly Count
– Invalidation Point: 1.5137
– Confirmation Point: 1.5053
– Downwards Target: 1.5036 — 1.5029
– Wave number: (v) olive green
– Wave structure: Motive
– Wave pattern: ImpulseEnding diagonal
Elliott Wave chart analysis for the GBPUSD for 26th November, 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 wave 1 blue is underway and within it, 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 1.5027.
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 1.5510 as within wave iii orange 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 underway.
Within wave (iii) green, waves i and ii orange are complete and wave iii orange is at its very early stages.
Within wave iii orange it is likely that waves 1 and 2 purple are complete and that wave 3 purple is underway.
Wave 2 purple unfolded as a zigzag labeled waves (A), (B) and (C) aqua.
Within wave 3 purple, this count expects that waves (1) and (2) aqua are likely complete and wave (3) aqua has started extending downwards.
Within wave (3) aqua it is likely that waves 1 and 2 red are complete and wave 3 red has started unfolding towards the downside.
Wave 1 red unfolded as an impulse labeled waves 1 through 5 lime.
Wave 2 red unfolded as a double zigzag labeled waves w, x and y lime.
Within wave 3 red it is likely that wave 1 lime is complete as an impulse and that wave 2 lime has started unfolding upwards.
Within wave 2 lime, the recent downwards movement retracing 95 % of the previous wave, it becomes more likely that wave 2 lime is unfolding as a flat correction labeled waves (a), (b) and (c) olive green with waves (a) and (b) olive green complete and wave (c) olive green is underway.
This count would be confirmed by movement above 1.5137.
For the first target we have a zone that starts at 1.5155 as at that level wave (c) olive green would reach 1.618 of wave (a) olive green and it ends at 1.5163 as at that level wave 2 lime would reach 0.382 of wave 1 lime and the second target is at 1.5195 as at that level wave 2 lime would reach 50 % of wave 1 lime.
This count would be invalidated by movement above 1.5336 as wave 2 lime may not retrace more than 100 % of wave 1 lime. As well this count would be invalidated by movement below 1.5053 as wave (b) olive green may not retrace more than 100 % of wave (a) olive green.
Alternate Hourly Wave Count
The only difference between both main and alternate counts is within the subdivisions of wave 1 lime.
This count expects that wave 1 lime is incomplete and that it has more to offer towards the downwards.
Within wave 1 lime waves (i) through (iv) olive green are complete and wave (v) olive green is at its early stages.
Wave (iv) olive green unfolded as a running triangle labeled waves a through e black.
This count would be confirmed by movement below 1.5053.
One method to calculate a thrust out of a triangle is first by connecting the ends of waves a and c black and another line connecting the ends of waves b and d black as drawn on today`s alternate count chart. We continue by drawing a vertical line from the end of wave b black till it meets the line connecting waves a and c black. Finally we draw a parallel and equal line from the end of wave e black and that would result in the suggested target for the completion of wave (v) olive green.
That line suggests that wave (v) olive green might find support at 1.5036 and the target zone we have ends at 1.5029 as at that level wave (v) olive green would reach 1.618 of wave (i) olive green.
This count would be invalidated by movement above 1.5137 as wave e black may not exceed the end of wave c black and it should be noted that the invalidation point would be moved to the end of wave e black once we have confirmation on the hourly chart that wave (v) olive green is underway.