5 Waves in a Lead Wave Suggests Another Bump Higher

FX:GBPUSD   British Pound/U.S. Dollar
Sterling is carving out a sequence of overlapping 3 wave moves which is giving the appearance of a triangle. If that is the case, we are working on the 'D' leg of the triangle.

The key element that is tipping me off to a trading opportunity is the 5 wave move higher from July 8-July 15. This is a leading wave and takes the shape of 5 waves. Therefore, there is likely going to be at least one more 5 wave move higher.

The trick is to find that area of support to buy into the next 5 wave move higher and it looks like an ending diagonal is forming (see purple waves).

In order for purple wave '3' to NOT be the shortest, purple wave '5' will need to terminate above 1.5500. Therefore, the deeper the GBPUSD             can move towards 1.5500, the better risk to reward ratio opportunity to buy. Wave relationships show up in the 1.57-1.5850 range for taking profit.

One pip below 1.5500 and the ending diagonal is invalid.

Good luck!
Interesting! Thanks Jeremy, will be watching this one! :)
You're welcome David. Cheers!
Very interesting, im considering also the most probably scenario is a triangle, tricky price action expected. Short term i would enter long near 1.55000 (huge psycho number) or better i will be looking to sell the E wave of the triangle.
+1 Reply
JWagnerFXTrader PRO FullTimeTrader
Yes, its a tricky one for sure right now. I love ending diagonals because they allow you to pinpoint entries, risk, and exit.

To make GBPUSD more interesting, IF (note the big IF) this is a triangle, we haven't seen one of the waves become more complex yet. So might be worth considering GBP crosses as well for trading opportunities.
FullTimeTrader JWagnerFXTrader
Right! i was thinking the same yesterday, leaving this one alone and watch the GBP crosses, for me the GBPJPY is already finished the 5-wave of an impulse and now is making a huge correction. I posted an idea, im not showing the EW counts but i did on my trading platform.
GBPJPY-convergence divergence setup near 195.000
nice analysis mate. i think that wave circle 5 will be completed . i have a similar targets for my already in shorts,
Short based on Clones ( a technique by <a href="/u/nmike/" target="_blank">@nmike</a>)
Nice trade GC - thank you for sharing.
Congrats. Looks like that support is around 1.5520 - .1.5530. What shall we expect from here? thanks.
Hi Deren - we'll look for 5 waves to form on a move to the upside. If they are carving out now, then targeting the 1.57-1.5850 range.

Since we may be in a triangle, I wouldn't get too cute. So it may be prudent to move the stop loss to break even in case it breaks down into a more complex structure to preserve capital and leave some more to the upside.
JWagnerFXTrader PRO JWagnerFXTrader
With this baby getting up to 1.5670, it fell short of the target. For those that moved the stop loss to break even, this trade is finished. There still is an opportunity for another 5 wave move higher, but this correction is getting complex so stepping aside for now.
so you wait and see? or you take a position at this time.?
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