Today, I would like to add a little twist and another variation of the count. The resolution is similar to the post from last week except prices may dig a little deeper.
Under the count above, 1.4639 is the key level that keeps ( iii ) from being the shortest of waves (i), ( iii ), (v). So if we get down into the 1.47 handle, a good risk to reward ratio opportunity develops to the long side using 1.4625 as a stop loss.
One other interesting point, the blue and red shaded areas represent a 3 standard deviation for the past year. Oddly enough, the 3 SD comes into play near 1.46. Therefore, I am more interested in GBPUSD to the long side over the medium term.
Keep an eye on the sentiment reading through the real time Speculative Sentiment Index. If this reading continues to grow, that could become a head wind for the outlook.
Remember, this is just another variation of the diagonal count from last week. A break above the red or purple resistance line would indicate the diagonal could be over. A pattern we're watching on the GBPJPY also appears to have some juice in it as well.
EUR/USD is sitting on some minor support as well.
However, real time speculative sentiment index is a head wind. Sentiment is growing towards more longs (GBP/USD at +2.9 & EUR/USD at +1.1) so we have an elliott wave count conflicting with sentiment. Not a lot of conviction on this long, but might be worth a tight stop.