4 - Crash Sequence & Brexit Volatility vs Wave Patterns
Cycle wave W (turquoise) top has been tagged at the end of January 2018, when the Triple Three pattern concluded with its Primary sequence WXYXZ (purple).
The bearish breach which followed until mid-August has been labeled as Primary W (red), the first leg of Cycle wave X (turquoise).
In mid-August 2018 GBP/USD bounced off the 1.2750 support with a bullish corrective sequence, which has been labeled as Intermediate (A) (green), the first leg of Primary X (red).
Intermediate (B) (green) has been unfolding within a complex corrective sequence, with a Triple Three pattern in its WXYXZ (purple) sub-waves.
The Descending Channel in which GBP/USD seems to be trapped in seems to be waiting for a major decision, and this could coincide with the fundamentals on Brexit sentiment factors.
From a Fibonacci perspective and also from technical standpoint, the 100% Fibonacci Extensions of Intermediates (A) & (B) (green) could be found as an interesting crossroad. The reaction at the 1.1310 levels could dictate if the next trend would have more claw marks on it, or if GBP/USD would be ready to surprise the markets with a bullish break-out.
As mentioned above, the reaction would be decisive, in the sense that the structure would be defined as either a Running or Expanding Flat for the larger degree Primary X (red) sequence.
In a Running Flat scenario, a breach of the 1.2600 levels could pave the way for more down-side, while in an Expanding Flat, a break-out of the 1.1310 levels could be a game-changer.
The preferred scenario would consist of an Expanding Flat, in which case a bullish break-out would act as the needed key trigger for GBP/USD to go bullish during the 1st quarter of 2019.
Should the current labeling be correct, then Intermediate (C) (green) should begin a bullish impulse, one which could reach as high as 1.3500 or even 1.3700 levels.
The bearish breach which followed until mid-August has been labeled as Primary W (red), the first leg of Cycle wave X (turquoise).
In mid-August 2018 GBP/USD bounced off the 1.2750 support with a bullish corrective sequence, which has been labeled as Intermediate (A) (green), the first leg of Primary X (red).
Intermediate (B) (green) has been unfolding within a complex corrective sequence, with a Triple Three pattern in its WXYXZ (purple) sub-waves.
The Descending Channel in which GBP/USD seems to be trapped in seems to be waiting for a major decision, and this could coincide with the fundamentals on Brexit sentiment factors.
From a Fibonacci perspective and also from technical standpoint, the 100% Fibonacci Extensions of Intermediates (A) & (B) (green) could be found as an interesting crossroad. The reaction at the 1.1310 levels could dictate if the next trend would have more claw marks on it, or if GBP/USD would be ready to surprise the markets with a bullish break-out.
As mentioned above, the reaction would be decisive, in the sense that the structure would be defined as either a Running or Expanding Flat for the larger degree Primary X (red) sequence.
In a Running Flat scenario, a breach of the 1.2600 levels could pave the way for more down-side, while in an Expanding Flat, a break-out of the 1.1310 levels could be a game-changer.
The preferred scenario would consist of an Expanding Flat, in which case a bullish break-out would act as the needed key trigger for GBP/USD to go bullish during the 1st quarter of 2019.
Should the current labeling be correct, then Intermediate (C) (green) should begin a bullish impulse, one which could reach as high as 1.3500 or even 1.3700 levels.
