SUMMARY - OVERALL BULLISH
GBPUSD has been in consolidation for a while now in an ascending triangle pattern. Ascending triangles are normally a bullish pattern but this one is coming in after a down move. So what does that mean? To see what the next move MIGHT be..we'll look at the overall wave count (remember, this is MY wave count. Wave counts are VERY subjective and others may have it different.) and then we'll use patterns to further reveal where prices might be headed.
SHORT TERM - THE CURRENT SITUATION - Explaining the Main Chart Above
Here you see 3 POTENTIAL bullish patterns and 1 COMPLETED one all coming off of the double top that was just formed: 1. bullish shark (beige), 2. bullish Gartley (purple) 3. a bullish bat (blue) and one COMPLETED bullish 5-0 pattern that comes off the heel of a profitable completed bearish shark (dark blue).
Prices currently sit at the completion point of the 5-0 pattern where they are also forming a triangle pattern (yellow). This is a short-term decision point as to what is going to happen next. If prices break down from here and setup a failed 5-0 thus also breaking the triangle lower, then odds are we'll see prices head down towards the completion of the 3 bullish patterns below. If they do not break down, then we will likely see prices head back up towards the upper trend line of the ascending triangle pattern testing it again (dashed red line), hesitate there, and then break through invalidating all 3 bullish patterns.
If prices do breakdown and head lower towards completing the 3 bullish patterns, then when 1, 2 or all 3 get filled, we will see prices reverse and head up in wave c. Note also that all 3 patterns will complete BELOW the lower ascending trend line of the ascending triangle. If it does do this, then it should be a false break of the triangle and we'll see prices head back up through the triangle. Either way, I see prices heading higher.
OVERVIEW - MONTHLY CHART
DAILY CHART - Focus In On The Corrective Wave
CONCLUSION - MY TRADING PLAN
We are at a critical decision point for this pair which will decide whether I get in now (adding to my LONG positions I already have) or wait until prices decline into the 3 bullish pattern, finish below the the ascending triangle for a false break, and get in LONG there. Either way, I am looking to get into the coming (or already started) wave 3 of the larger degree wave C of the ABC corrective pattern.
If prices do descend further into the 3 bullish patterns, then wave 3 of the wave C has not yet started and we are still in the wave 2. At the point where prices fill the 3 patterns. That would be a GREAT point to get in on the start of wave 3. If prices move up and break the ascending triangle, then that would be confirmation that wave 3 has already started and that would be a good point to get in.
In any case, I am BULLISH on this pair and do not see that this pair has finished this correction and ready to descend into a new downtrend now even if the wave C does not materialize and the correction unfolds in a more complex way,
Please keep in mind that I am not giving any trading signals here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!
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