The Curious Tale of Three Gaps (short then long)

FX:GBPUSD   British Pound / U.S. Dollar
194 2 5
Take a look at this daily chart . The wave starts on 13 March last year and the first gap appears over the weekend of Friday 13th September. The level is 1.58792. The wave completes half way through July this year and a new wave down starts on 15th July. My interpretation of the centre of this wave is 3 September. The current price as I write is (amazingly) 1.6118 at the 61.8 extension and the 100% extension lies at precisely 1.58792 the price of the 13 September Gap. Moreover joining the start of the second wave to my anticipated end with a fibonacci circle puts a line straight through that gap at the 11.09 level!! If the current wave finishes at this level I will of course go long with a target above 1.70.
As an aside I notice that the Fed is now complaining that the dollar is too strong and the Japanese are complaining that the Yen is too weak - so be careful what you wish for is all I can say! I also believe that Mark Carney wants a strong pound going into the next election and even though it might not happen - making everyone believe that interest rates are going up first could do the trick.
Even though this is just my interpretation of the mathematical dynamic, there is a strange beauty in those missing bars!
You may be right, and time will prove it so. That's the great thing about forecasting! Nevertheless my sources are Wall St Journal 8th October via Jon Hilsenrath

1. Federal Reserve officials have become more concerned about weak growth overseas and the impact of a strengthening U.S. dollar on the domestic economy, warns WSJ Fed-whisperer Jon Hilsenrath, adding that, the stronger currency, by reducing the cost of imported goods and services, could hold U.S. inflation below the Fed’s 2% objective. Fed staff also reduced its projection for medium-run growth in part because of these concerns. The minutes showed more clearly than before that concerns about global growth and the disinflationary impact of a strong currency are giving officials additional pause about moving quickly on rates.

2. And this from the Financial Review

Prime Minister Shinzo Abe doesn’t control monetary policy but it is hard to go past the weak yen as the most striking feature of the eponymous Abenomics program, which has been under way now for almost two years.

So it is slightly unnerving to see the man who has committed himself to national revival built around the export-boosting potential of a weak currency start to express sympathy with complaints in the Japanese business community about whether the weak yen is really worth it after all.

3. I believe that going into the British election it is more beneficial (from the governments point of view) for the voters to feel the benefits of cheaper imports on which British shoppers are addicted than go for the longer term benefit of the weak pound helping exports and boosting revenues from overseas investments. As long as this can be achieved with minimal or no rise in interest rates. Besides Osborne has nailed his credentials to the mast and a strong pound at the time of the election is a symbol. It also means cheaper holidays for Brits.

First of all, I wouldn't count gaps on forex, they don't mean anything. Gaps on forex happen only on weekends, and that happens rarely.
Secondly, I did not understand that the FED is complaining about the dollar being too strong. The Japanese are not complaining that the yen is too weak, they said that if it weakens further, it would be a problem. That is only a warning signal, you wouldn't expect them to complain at the last moment right?? Last but not least, the British don't want a stronger pound. Two days ago, one politician said that the pound is overvalued by about 10 15%. Now that doesn't mean that the pound will fall, it just means that they don't want a stronger pound and they won't do anything to make it happen. The interest rate rise has been planned months ago. I am no fundamentalist, but this information is out there, and I believe that you got it wrong in your chart description.
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