GBPUSD 25th January, 2017

Cable unfolded upwards as expected under the main count and targets were reached and exceeded.

The nature of the recent upwards movement suggests that upwards correction is structurally mature, however, we need evidence to support these suggestions to anticipate that a top is in place and that trend reversal is just around the corner.

Today we are adding an alternate daily chart which expects that wave (4) black is incomplete and that it has more to offer upwards as we will soon discuss.

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

SynopsisBy movement below 1.2253 and eventually 1.1985 Cable would be expected to find support at 1.1905 and if exceeded then to 1.1615. However, if Cable unfolded above 1.2776 Cable would be expected to find resistance at 1.2905 and if exceeded then Cable would be expected to find resistance at 1.3109 and finally 1.3300.

Main Hourly Count

– Invalidation Point: 1.2776
– Confirmation Point: 1.2253 — 1.1985
– Downwards Targets: 1.1905 — 1.1615
– Wave number: 3 blue
– Wave structure: Motive
– Wave pattern: Impulse

Elliott Wave chart analysis for the GBPUSD for 25th January, 2017. 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.

This count would be confirmed by movement below 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 1.2776 as within wave (5) black wave 2 blue may not retrace more than 100 % of wave 1 blue.

Main Hourly Wave Count


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

This count expects that within wave (5) black wave 1 blue is likely complete and wave 2 blue has started unfolding in a sideways manner.

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

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

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

Wave iv pink unfolded as a double combination labeled waves (w), (x) and (w) green.

Wave (w) green unfolded as a three wave structure labeled waves a, b and c orange.

Wave (x) green unfolded as a triangle labeled waves a through e orange.

Wave v pink unfolded as an ending diagonal labeled waves (i) through (v) green with wave (v) green being a truncated fifth wave.

Wave 2 blue is seen as a structurally mature zigzag labeled waves a, b and c pink.

Wave c pink is likely complete as an impulse labeled waves (i) through (v) green.

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

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

As far as MACD study goes, MACD is exhibiting signs of two bearish divergences the first between the ends of waves a and c pink. As MACD made a new high at the end of wave a pink and failed to make new highs representing the price highs for wave c pink. The second divergence is present between the ends of waves (iii) and (v) green within wave c pink.

It would be initially confirmed that wave 3 blue is unfolding downwards by movement below 1.2253 and the final confirmation point is at 1.1985.

We have an initial target for the completion of wave 3 blue at 1.1905 as at that level wave 3 blue would reach equality with wave 1 blue and at 1.1615 wave 3 blue would reach 1.382 of wave 1 blue.

This count would be invalidated by movement above 1.2776 as within wave (5) black wave 2 blue may not retrace more than 100 % of wave 1 blue. It should be noted that the invalidation point would be moved to the end of wave 2 blue once we have confirmation on the hourly chart that wave 3 blue is underway.

Alternate Daily Wave Count


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

The alternate daily count expects that wave (4) black is incomplete and that it has more to offer towards the upside.

Wave (4) black is seen unfolding as a flat correction labeled waves A, B and C blue with waves A and B blue complete and wave C blue is unfolding upwards.

Wave A blue unfolded as a zigzag labeled waves a, b and c pink with wave a pink unfolding as an impulse labeled waves (i) through (v) green.

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

This count expects that wave c pink is unfolding upwards as a five wave structure to complete wave (4) black.

This count would be confirmed by movement above 1.2776.

At 1.2905 wave (4) black would reach 0.236 of wave (3) black and at 1.3109 wave C blue would reach 1.382 of wave A blue and finally at 1.3300 wave C blue would reach 1.618 of wave A blue.

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 as well, this count would be invalidated by movement below 1.1985 as within wave C blue no second wave may retrace more than 100 % of its first wave.

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