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GBPUSD: Is It Downtrend Continuation Time Yet ?!

In our previous analysis GBPUSD: Cable`s Mighty Downtrend the main count expected Cable to unfold upwards to complete a fourth wave correction before resuming its downtrend.

Cable unfolded upwards in a corrective manner and this week`s main count expects Cable to reverse directions and unfold downwards within a fifth wave.

The alternate count expects that Cable`s upwards correction has more to offer upwards to complete a second wave correction of minute degree.

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

Main Count

– Invalidation Point: 1.4571
– Confirmation Point: 1.4235
– Downwards Target: 1.4195 — 1.4169 — 1.4100
– Wave number: (iii) green
– Wave structure: Motive
– Wave pattern: ُImpulse

Alternate Count

– Invalidation Point: 1.4079 — 1.5241
– Confirmation Point: 1.4670
– Upwards Target: 1.4709 — 1.4796
– Wave number: (c) green
– Wave structure: Motive
– Wave pattern: ُImpulse/Ending diagonal

Elliott Wave chart analysis for the GBPUSD for 18th February, 2016. Please click on the charts below to enlarge.

Main Wave Count

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

Within wave C maroon intermediate waves (1) and (2) black are complete and intermediate wave (3) black is unfolding downwards.

Within intermediate wave (3) black it is expected that minor waves 1 through 4 blue are complete and that wave 5 blue is unfolding downwards.

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

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

Wave v pink unfolded as a zigzag labeled waves (a), (b) and (c) green.

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

Minor wave 3 blue unfolded as an impulse labeled waves i through v pink.

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

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

Wave 4 blue is likely complete and wave 4 blue unfolded as a zigzag labeled waves a, b and c pink.

This count would be confirmed by movement below 1.4235.

At 1.4195 wave (iii) green would reach 0.618 of wave (i) green and this target is a conservative target. At 1.4169 wave iii pink would reach 1.382 of wave i pink and the final target which is at 1.4100 as at that level wave iii pink would reach 1.618 of wave i pink.

This count would be invalidated by movement above 1.4571 as wave (ii) green may not retrace more than 100 % of wave (i) green. It is worth mentioning that the invalidation point would be moved to the end of wave (ii) green once we have confirmation on the hourly chart that wave (iii) green has started unfolding downwards.

Alternate Wave Count

This count is a very bearish count as it expects that wave 3 blue is extending downwards as an impulse with wave i pink complete and wave ii pink is unfolding upwards in a corrective manner.

Wave ii pink is unfolding as a zigzag correction labeled waves (a), (b) and (c) green with waves (a) and (b) green complete and wave (c) green is unfolding upwards.

Wave (a) green unfolded as an impulse labeled waves i through v orange with wave i orange unfolding as a leading diagonal labeled waves 1 through 5 purple.

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

This count would be initially confirmed by movement above 1.4571 and the final confirmation point is at 1.4670.

At 1.4703 wave (c) green would reach 0.786 of wave (a) green and at 1.4796 wave ii pink would reach 0.618 of wave i pink.

This count would be invalidated by movement below 1.4079 as wave (b) green may not retrace more than 100 % of wave (a) green. As well this count would be invalidated by movement above 1.5241 as wave ii pink may not retrace more than 100 % of wave i pink.

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