GBPUSD: Bearish Now? Or Just Setting The Stage For A HUGE Rally?

FX:GBPUSD   British Pound / U.S. Dollar
2220 2 39
As recently as last couple of days, I was still looking at the possible bullish wave count on this pair while also following a bearish wave count. Price action on GBPUSD had been very unclear to me and I had decided to stay away from it until it became clearer to me what it was to do. Well, I think the direction has just become very clear! At least for the near future.

If you have followed my posts and if you remember a previous post where I gave a brief lesson on how to project future price action by anticipating divergence, then take that lesson and apply it again here. In this 4HR chart above, I break down further the subwaves of this corrective pattern to project through to the bigger picture as shown in the Daily and Weekly charts as to what I see is to happen. First, look at the breakdown of the wave A. The wave A was a 5-wave             advance. This wave B is unfolding in a 3-wave             5-3-5 abc zigzag . If that is correct, then the following wave C of (A) back up should be an impulsive 5-wave             advance that will take prices up and beyond the wave A highs.

So getting back to projecting using possible divergence. Now that I am establishing that this current drop wave B is in the 5-wave             wave (c) right now and that the way I see it is that the wave iii             of that wave (c) may have completed, then the next move should be a shallow wave iv and then another drop in a wave v to complete the wave (c) and the higher degree wave B. So when this shallow wave iv move back up occurs, that will cause the RSI to move back up and probably slightly out of the oversold zone. But then the subsequent wave v drop back down will cause the RSI to dip back down again and should not make another low. This will form the divergence we need to confirm the end of the wave B.

There is the POTENTIAL Bat whose completion should mark the end of the wave B and if prices do follow the path that I have laid out, then that will more or less confirm that the next BIG MOVE is UP in the wave C.

In my overall weekly wave count, what I am seeing is that the new downtrend starting from where I have the wave B highs is part of the new larger wave C down. That wave C should eventually make MAJOR new lows but that is on a yearly TF. On this weekly TF, this downtrend could very well have already ended and a retrace back up is underway. And this retrace back up should last on the order of several months.

The way I see it is that there are 2 possibilities to label this downtrend. My working wave count is that this downtrend from the wave B highs was a wave (1) of that overall larger wave C I mentioned above. That means that this retrace is a wave (2). And that wave (2) has the possibility to retrace up to 100% of the wave (1). Being that this is a weekly chart of GBPUSD             , that is a very significant move.

The Alternate wave count (marked in pink) is that wave (1) ended on the initial move down off that wave B highs. And the subsequent retrace was a wave a of (2) and the following drop down was a wave b of (2). That wave b ended at the 1.272 extension of the wave (1) which is typical of a expanded flat corrective-type wave (2). That would have the wave c of (2) retracing up to at least the 1.272 extension of the wave b of (2) which also coincides with the .886 retrace of the entire move down.

There is also a POTENTIAL Cypher in formation that points to prices retracing up to at least the .786 retrace level.

So here in this Daily chart , going with the working wave count that the bottom here is the end of the wave (1), then the move up from there should be a wave A of a larger wave (A) of (2). Then the fall from the top of that wave A should be the wave B of (A) in progress. That wave B down is not done yet.
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Update status
Comment: Bat Completed

Agree with your weekly chart. I had posted Cypher on monthly chart which shows Leg D at
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