GBPUSD 27th December, 2016

Quite an uneventful session for Cable which is what should we typically expect on the holiday season. However, we should keep in mind that with such low volatility spikes might take place as we have seen on a couple of occasion before.

We are updating both counts according to the latest price action and -as a reminder- the main count expects Cable to unfold in a corrective manner within a fourth wave while the alternate count expects Cable to make a new low to complete a third wave correction.

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

Synopsis By movement above 1.2313 and eventually 1.2391 Cable would be expected to find resistance at 1.2346 and if exceeded then to 1.2419. However, if Cable unfolded below 1.2228 Cable would be expected to find support at 1.2219 and if exceeded then to 1.2200.

Main Hourly Count

– Invalidation Point: 1.2571 — 1.2228
– Confirmation Point: 1.2313 — 1.2391
– Upwards Targets: 1.2346 — 1.2419
– Wave number: iv pink
– Wave structure: Corrective
– Wave pattern: Zigzag

Alternate Hourly Count

– Invalidation Point: 1.2313
– Confirmation Point: 1.2228
– Downwards Targets: 1.2219 — 1.2200
– Wave number: v orange
– Wave structure: Motive
– Wave pattern: ُImpulse/Ending diagonal

Elliott Wave chart analysis for the GBPUSD for 27th December, 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) through (4) black are complete and intermediate wave (5) black is at its very early stages.

Intermediate wave (3) black unfolded as an impulse labeled waves 1 through 5 blue.

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

Wave 2 blue unfolded as a double zigzag correction labeled waves w, x and y pink.

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

Wave (4) black unfolded as a triple combination correction labeled waves W, X, X, Y and Z blue complete.

It would be initially confirmed that wave (5) black is unfolding downwards by movement below 1.2089 and the final confirmation point is at 1.1970.

We have a very initial target for the completion of wave (5) black at 1.1154 as at that level wave (5) black would reach 0.618 of wave (1) black. It is worth noting that we will be able to calculate short term targets once wave (5) black starts to subdivide towards the downside.

This count would be invalidated by movement above 1.4566 as wave (4) black may not enter the price territory of wave (1) black and we should keep in mind that the invalidation point would be moved to the end of wave (4) black once we have confirmation on the daily chart that wave (5) black is underway.

Main Hourly Wave Count


N.B.: This count is presented on a 2-hours chart for clarification purposes.

This count expects that wave (4) black is likely complete as a triple combination correction labeled waves W, X, X, Y and Z blue and that wave (5) black is at its very early stages.

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

Wave c pink unfolded as an ending diagonal labeled waves (i) through (v) green.

This count expects that within wave (5) black waves i through iii pink are complete and wave iv pink has started unfolding in a sideways manner.

Wave ii pink unfolded as an expanded flat correction labeled waves (a), (b) and (c) green with wave (c) green unfolding as an impulse labeled waves i through v orange.

Wave iii pink unfolded as an impulse labeled waves (i) through (v) green and wave iv pink has started unfolding upwards.

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

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

Wave (v) green -uncommonly- extended downwards as an impulse labeled waves i through v orange with wave v orange unfolding as an impulse labeled waves 1 through 5 purple.

As far as MACD study goes, MACD shows conflicting signals. As we discussed in the previous analyses, Cable showed two bullish divergences. However, Cable continues to develop a bearish divergence as MACD readings created a new high while price action failed to follow suit.

This count would be initially confirmed by movement above 1.2313 and the final confirmation point is at 1.2391.

At 1.2346 wave iv pink would reach 0.236 of wave iii pink and at 1.2419 wave iv pink would reach 0.382 of wave iii pink.

This count would be invalidated by movement below 1.2228 as within wave A within wave iv pink no second wave may retrace more than 100 % of its first wave. As well, this count would be invalidated by movement above 1.2571 as wave iv pink may not enter the price territory of wave i pink.

Alternate Hourly Wave Count


N.B.: This count is presented on a 2-hours chart for clarification purposes.

The difference between both main and alternate counts is within the subdivisions of wave (v) green within wave iii pink.

Wave (v) green is seen unfolding as an impulse labeled waves i through v orange with waves i through iv orange complete and wave v orange has started unfolding downwards.

This count would be confirmed by movement below 1.2228.

At 1.2219 wave v orange would reach 50 % of wave iii orange and at 1.2200 wave v orange would reach 0.618 of wave iii orange.

This count would be invalidated by movement above 1.2313 as wave iv orange may not enter the price territory of wave i orange and it should be noted that we should move the invalidation point to the end of wave iv orange once we have confirmation on the hourly chart that wave v orange is unfolding downwards. It is also worth noting that wave iii orange is shorter than wave i orange, therefore, wave v orange is expected to be shorter than wave iii orange.

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