GBPUSD 26th October, 2016

On Wednesday`s session, Cable unfolded upwards and even though Cable did not reach neither count`s confirmation or invalidation points. Cable found a top that exactly matches the end of wave E to the fraction of a pip.

The upwards movement increases the probabilities of the alternate count and at this stage, both counts have almost equal probabilities.

We are updating the main hourly count according to the latest price action which expects Cable to unfold downwards within a fifth wave.

The alternate count expects that Cable has completed two legs within a zigzag correction and therefore expects Cable to reverse directions and unfold upwards to complete the last leg within a zigzag correction.

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

Synopsis By movement below 1.2082 and eventually 1.1970 Cable would be expected to find support at 1.1831 and if exceeded then to 1.1721. By movement above 1.2484 Cable would be expected to find resistance at 1.2515 and if exceeded then to 1.2596.

Main Hourly Count

– Invalidation Point: 1.2333
– Confirmation Point: 1.2082 — 1.1970
– Downwards Targets: 1.1982 — 1.1831 — 1.1721
– Wave number: (v) green
– Wave structure: Motive
– Wave pattern: ُImpulse/Ending diagonal

Alternate Hourly Count

– Invalidation Point: 1.2915 — 1.2082
– Confirmation Point: 1.2484
– Upwards Targets: 1.2515 — 1.2506
– Wave number: c orange
– Wave structure: Motive
– Wave pattern: ُImpulse/Ending diagonal

Elliott Wave chart analysis for the GBPUSD for 26th October, 2016. Please click on the charts below to enlarge.

Main Daily Wave Count

For the long term, 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 waves (1) and (2) black are complete and intermediate wave (3) black is unfolding downwards.

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

Within intermediate wave (3) black it is expected that minor waves 1 and 2 blue are complete and that wave 3 blue has started unfolding downwards.

Wave 1 blue unfolded as an impulse labeled waves i through v pink.

Wave i pink unfolded as a leading diagonal labeled waves (i) through (v) green.

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

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

Wave iii pink unfolded as a zigzag labeled waves a, b and c orange.

Wave iv pink unfolded as a zigzag labeled waves a, b and c orange.

Wave v pink unfolded as a zigzag labeled waves a, b and c orange.

Minor wave 2 blue unfolded upwards likely as a double zigzag correction labeled waves w, x and y pink.

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

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

Within minor wave 3 blue, this count expects that waves i and ii pink are complete and that wave iii pink has started unfolding downwards.

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

Within wave iii pink, waves (i) through (iv) green are likely complete and wave (v) green is underway.

This count would be confirmed by movement below 1.1970.

Based on a thrust out of a triangle we have a first target at 1.1831 and at 1.1721 wave (v) green would reach equality with wave (i) green and at 1.1693 wave iii pink would reach 0.786 of wave i pink.

This count would be invalidated by movement above 1.2915 as wave (iv) green may not enter the price territory of wave (i) green. It is worth noting that the invalidation point should be moved to the end of wave (iv) green once we have confirmation on the daily chart that wave (v) green is unfolding downwards.

Main Hourly Wave Count

This count expects that within wave iii pink waves (i) through (iv) green are complete and that wave (v) green is at its very early stages.

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

Wave i orange unfolded as an impulse labeled waves 1 through 5 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 (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 triangle labeled waves a through e orange.

Within wave (v) green it is likely that waves i and ii orange are complete and that wave iii orange has started unfolding downwards.

As far as MACD study goes, MACD is sending mixed signals at this stage, as at the hourly level MACD is showing a bearish divergence as the -so far- end of wave (iv) green has registered a higher high than the end of wave (ii) green while price action failed to register such higher high. This behavior agrees with the main count. On the smaller time frames MACD is showing a bullish divergence as MACD has recently registered lower lows while price action failed to follow suit.

This count would be initially confirmed by movement below 1.2082 and the final confirmation point is at 1.1970.

At 1.1982 wave iii orange would reach 1.618 of wave i orange. Based on calculating a thrust out of a triangle the first target is at 1.1831 and at 1.1721 wave (v) green would reach equality with wave (i) green. We will be able to refine these targets once wave (v) green starts subdividing towards the downside.

This count would be invalidated by movement above 1.2333 as wave e orange may not retrace more than 100 % of wave c orange and it should be noted that the invalidation point would be moved to the end of wave ii orange once we have confirmation on the hourly chart that wave iii orange is underway.

Alternate Hourly Wave Count

The difference between both main and alternate counts is within the subdivisions of wave (iv) green as this count expects that wave (iv) green is incomplete and that wave (iv) green is unfolding as a zigzag correction labeled waves a, b and c orange with waves a and b orange complete and wave c orange has started unfolding upwards.

This count would be confirmed by movement above 1.2484.

At 1.2515 wave (iv) green would reach 50 % of wave (iii) green and at 1.2596 wave c orange would reach equality with wave a orange.

This count would be invalidated by movement above 1.2915 as wave (iv) green may not enter the price territory of wave (i) green and as well this count would be invalidated by movement below 1.2082 as within wave c orange no second wave may retrace more than 100 % of its first wave.

Food For Thought:
An alternate daily count exists which expects that within wave (3) black, waves 1 through 4 blue are complete and that wave 5 blue is unfolding downwards. We are including the chart for that count for clarification purposes.

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