GBPUSD: Makings Of A Bear Trap ?

On our previous analysis, main count expected Cable to resume its downtrend following the completion of an upwards correction.

Cable unfolded in a sideways manner testing the latest resistance level before reaching both targets and Cable reversed directions and made new lows.

Main count expects that Cable has completed two out of three waves within a sideways expanded flat correction. On the other hand, the alternate count expects that Cable has only completed one wave within that expanded flat correction and that Cable has one more push downwards.

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

Main Count

– Invalidation Point: 1.2776 — 1.1985
– Confirmation Point: 1.2234 — 1.2317
– Upwards Targets: 1.2319 — 1.2353 — 1.2415
– Wave number: c pink
– Wave structure: Motive
– Wave pattern: Impulse / Ending diagonal

Alternate Count

– Invalidation Point: 1.2776 — 1.1985
– Confirmation Point: 1.2234 — 1.2317
– Upwards Targets: 1.2319 — 1.2353 — 1.2415
– Wave number: c pink
– Wave structure: Motive
– Wave pattern: Impulse / Ending diagonal

Elliott Wave chart analysis for the GBPUSD for 16th January, 2017. Please click on the charts below to enlarge.

Main Wave Count


N.B.: This count is presented on the 6-hours bar chart for clarification purposes.

This count expects that within wave C maroon waves (1) through (4) black are complete and that intermediate wave (5) black is unfolding downwards.

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

The second wave X blue unfolded as a zigzag labeled waves a, b and c pink.

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

Wave b pink unfolded as a triangle labeled waves (a) through (e) green.

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

This count expects that within wave (5) black wave 1 blue is complete and that wave 2 blue is underway.

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

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 with wave (v) green unfolding as an impulse labeled waves i through v orange.

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 impulse labeled waves (i) through (v) green.

The main count expects that Wave 2 blue is unfolding as an expanded flat correction with waves a and b pink complete and wave c pink has started unfolding upwards.

Wave b pink unfolded as a zigzag labeled waves (a), (b) and (c) green with wave (b) green unfolding as a triangle.

This count would be initially confirmed by movement above 1.2234 and the final confirmation point is at 1.2317.

At 1.2319 wave 2 blue would reach 0.382 of wave 1 blue and at 1.2353 wave c pink would reach 1.382 of wave a pink and finally at 1.2415 wave c pink would reach 1.618 of wave a pink.

This count would be invalidated by movement above 1.2776 as wave 2 blue may not exceed more than 100 % of wave 1 blue. As well, this count would be invalidated by movement below 1.1985 as within wave c pink no second wave may retrace more than 100 % of its first wave.

Alternate Wave Count


N.B.: This count is presented on the 6-hours bar chart for clarification purposes.

The only difference between both main and alternate counts is within the subdivisions of wave b pink as the alternate count expects wave b pink has more to offer downwards.

This count expects that wave b pink is unfolding downwards as a zigzag labeled waves (a), (b) and (c) green with waves (a) and (b) green complete and wave (c) green is at its late stages.

Within wave (c) green it is likely that waves i through iv orange are complete and that wave v orange is unfolding downwards.

This count would be confirmed by movement below 1.1985.

We have a target zone for the completion of wave (c) green and therefore wave b pink. That target zone starts at 1.1970 as at that level wave v orange would reach 0.786 of wave i orange and at 1.1964 wave b pink would reach 1.272 of wave a pink.

This count would be invalidated by movement above 1.2317 as within wave b pink no B wave may retrace more than 100 % of its A wave.

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