GBPUSD sell whether we vote yes or no

FX:GBPUSD   British Pound / U.S. Dollar
1484 7 34
Today we have the vote in the UK and I just want to point out that IF the UK decides to remain in the EU nothing changes and the bullish response that might follow will be a relief rally and nothing more besides a good way for top traders to sell the high. IF the UK decides to leave the EU it is open season and we will go down fast. In terms of wave count we see a consolidation on the daily time frame that I counted as a corrective combination due to the fact that it invalidated the possibility to count is as a 'Flat' correction in terms of Elliott Wave . This however doesn't change much besides the fact that a wave Y can't exist out of 5 inner waves and I will therefore be looking for a completion of this correction at 1.50, or a wave B lower and then a relief rally for wave C higher.

It is very useful to keep an eye on my dollar index             scenario's since both GBPUSD             and EURUSD             will impact the dollar index             for the most part and these pairs will correlate later today.

Safe trading and it is not necessary to trade this event as I explained in my dollar index             post.


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Comment: I showed some price zones in the chart that I keep in mind when looking for the end of a consolidation. The move lower was strong and in high volatile markets it is key to keep an eye on the bigger picture. The three legs lower from the high of 2014 are very harmonic in terms of extensions and retraces. Next week I will be looking for the consolidation of the bearish move as a result of Brexit and sell the continuation. However I don't want to sell GBPUSD out of no mans land in a 1700 pips range caused by Brexit. So I will use these price zones in my advantage by looking at structure confirmation out of these zones (not the other way around)
Comment: I think we will see another bullish leg in the beginning of next weeks trading to complete the consolidation of the bearish move as a result of Brexit. Buying the continuation is what I'm looking for.
great analysis, man. gj!
+1 Reply
Its not intending to lower after the break of strucure, so going long would be a nice idea.
Thanks for your chart. We have the same view that this is a correction, and at the upper trendline. However this is a flat -- flats are 3-3-5 formations. You are confusing a flat (3-3-5) with a WXY pattern (double three). See: http://elliottwave-forecast.com/eliottwave/three-types-of-elliott-wave-flats-2/
TimStuyts ezodisy
I agree with the structure of a Flat (3-3-5) but that's not the only rule, wave B needs to retrace 90% of wave A which it didn't. This is a common mistake made by many analysts and that's why I mentioned it in the post. Elliott Wave analyses depend on the details and this is one of them. Good trading to you and let's see what the vote will give us.
ezodisy TimStuyts
Good point about detail. I've never heard of this 90% rule for a B wave in a flat. Running flats do not necessarily retrace so far. The current one reached beyond the 78.6%, which is fine in my estimation. In any case overall I agree with your analysis of this formation being corrective and a sell on the way.
TimStuyts ezodisy
We are on the same page regarding the consolidation and that's key. I personally see the dollar index as leading and we either move higher for a wave 3 (if the low is already in place(15)) and in that case I wait for wave 4 to settle, or we move lower for an extended wave (17) and in that case I wait for the consolidation to complete and sell the last leg lower (19). In terms of GBPUSD, only if we see a clear 3 wave pattern from the low of wave X, I will look to sell after the relief rally that I will count as wave C of Y. That will give the 3-3-3 count I'm looking for.
+1 Reply
watsonzou26 TimStuyts
Your short idea is working perfect.
+1 Reply
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