DanV
Short

GBPUSD - COULD BE READY FOR RETRACEMENT

FX_IDC:GBPUSD   POUND STERLING / US DOLLAR
Most USD pairs weakness against USD has be very stretched have been appearing to either reverse trend or at least make noticeable retracement

GBPUSD             is not different. It is possible that the recent bottom formed in April could be significant one resulting in trend change or may be just an intermediate low. Also as it was severally oversold exasperated by uncertainties associated with the UK lection which resolved very cleanly it benefited from lifting of that uncertainty.

However at current level it could offer opportunity to short with retracement or retest of the low in prospect.

Technical Summary:

1. Weekly chart shows that it has approach the median line and 38.2% retracement of the entire decline from July 2014 which could offer resistance See chart below
2. Since the low in April it appears to have abc zigzag with price having just poked above the previous resistance possibly triggering stops.
3. At a level with several Fib extensions and projections offering confluence.
4. Accompanied by clear RSI divergence.
5. Possible decline to 1.51 -1.50 would feasible in case of retracement or might continue all the way to retest the April low.

Warning: This is my interpretation of price action using TA approach that I consider helps me most, but could be completely wrong. Therefore as always, do your own analysis for your trade requirement and ignore my views.

For those who appreciates my analysis, select to follow me and the chart for notification of future updates. Indicate you like my analysis by thumbs up, comments and sharing it with others. If you have an alternative idea then please be constructive and share for all to learn from.

Thank you for taking the time to read my analysis.

DanV
danv-charting.com
DanV MOD
2 years ago
Weekly chart referred to
snapshot
-1 Reply
I came to a similar conclusion, based on a different analysis method where I found a harmonic price pattern inside a parallel channel. I had not spotted the 38.2% retracement of the drop from July 2014, which add to my case as well, thanks for this. Price has clearly stopped and stalled since it touched the 1.56 handle yesterday and had not been able to move up further for the last 13 hours. It may be getting ready for a retracement.
GBPUSD: The Cable after a week of Elections, Rallies and Spikes
+2 Reply
DanV MOD JasperForex
2 years ago
That is good to know. When the trade is setting up often it should be evident in most TA approached and Harmonic when place correctly give very clear area where the move is likely to end or begin.

However regarding the price stalling if you look it it probably a bull flag, so am waiting for final poke up before actual reversal. This is supported by the fact that the wave C on my chart still has 5th wave to develop. But in term of price zone there is very limited upside.

So will follow keenly and thank you for sharing your analysis. I appreciate it.
+1 Reply
Intuit PRO
2 years ago
Hey Dan, While I was working on this I noticed you posted this chart. Seems we're on a similar count here. I confirmed mine with Neely's Retracement ID, here are the structure labels I found:

snapshot


I labeled them with possible waves. Looks like we may have just completed part of a 3rd wave extension down, and are now in a large correction which is starting with what appears to be a :3. Due to the harmonic patterns that are forming, ie. a shark, crab and butterfly, I think that there is a good chance that we get a c failure flat and that this is a long-term high. It's difficult to determine but it definitely at the least seems like we're peaking out here and are going to get a big correction down before continuing up anymore to complete this correction.

snapshot
+1 Reply
Intuit PRO Intuit
2 years ago
Sorry the count on that 2nd chart is wrong. It should look more like this according to the weekly retracement ID.
snapshot
+1 Reply
DanV MOD Intuit
2 years ago
Thankyou for sharing.

I have tried to read up on Neely's approach but find that rather difficult for some reason. So I don't quite follow your labels.

Also it seem from your last chart that the move of the April low as a zizgzag is labelled differently though still coming to similar conclusion ie this cycle should end soon and at least make partial retrace.

Secondly I note you have attempted to label 5 wave decline from July 2014. This has proved to be very difficult and I suspect we do not have 5 wave move. It is probably a double zigzag and it would more likely fit the larger counts with move from 2009 low. But for now for this trade it is not relevant.

Thanks again.
Reply
Intuit PRO DanV
2 years ago
The labels are pretty simple, basically just based off surrounding waves you can determine whether or not the wave you're measuring is a three or a five. And also even goes into detail telling you whether its a First Three (:F3), Center Three (:c3), Five (:5), Last Five (:L5), x-wave (x:c3), etc. It is kinda confusing but it's really useful for determining, objectively, what kind of wave you are looking at.

Looking back into it, you're probably right. The first wave down from July 2014 has too much momentum relative to the rest of the pattern. I am having trouble figuring out how this structure could fit into a double zigzag though. The best count I came up with is a single zigzag. Maybe you can find a better count that fits this structure? I'm still kinda leaning towards and extension but i'll have to look at the bigger count as well. That's a job for another night tho.

snapshot
+1 Reply
DanV MOD Intuit
2 years ago
Thanks. I can see that it would be more effective labelling it your way. Though I would get muddled up having been used to the traditional way of labelling.

Fist zigzag ends with your L5 and retracement wave x then second zigzag which is more obvious if you see it in price bars or candles.
Reply
Intuit PRO DanV
2 years ago
Yea I was thinking that too, that my Wave (4):F3/:c3 is actually the x wave. However, an :L5 can't be preceded by an x wave which is what really threw me off.

It looks pretty clear on this chart that from Oct 27 to April 13th that move is impulsive. Wave 4 also meets all the minimum requirements and fits into the time-target nicely. That's what's really throwing me off here and making me think this is an extension because on the last count I just posted wave seems kinda small in time and price relatively.
Reply
Intuit PRO Intuit
2 years ago
Wave B* (cant use brackets i guess)
Reply
DanV MOD Intuit
2 years ago
Well I would see no objection to wave B in bracket but then I use it all the the time. With more price data it will clear up I am sure.
Reply
Intuit PRO DanV
2 years ago
Indeed. It could be possible, more data will definitely clear things up though. For now it looks distinctly bearish either way. Thanks for your sharing your insight. :)
Reply
DanV MOD Intuit
2 years ago
yw
Reply
HI Danv my idea
snapshot
+3 Reply
DanV MOD manijeh.kazemi.33
2 years ago
Hi, Thanks for sharing.

It could well stretch to that wouldn't rule it out. Though sometime AB=CD is not always 100% sometime it is 78.6% or 88.6% but agree otherwise. Well done.
+1 Reply
DanV MOD
2 years ago
UPDATE: It seems that the wave iii might have extended (as they often do), how ever I would not give up on this trade. It is now approaching next higher level of previous resistance and other fib confluences. Also now RSI on H4 is close to previous peak hence technically still diverging and is weakening along with MACD and histogram. It is possible for it to tag 1.58 or slightly above but worth watching. Here is the update chart
snapshot
Reply
tcas
2 years ago
It can be a good opportunity to sell today. Think 1.56800 is a good price.
Reply
DanV MOD tcas
2 years ago
Yes indeed. But if the top is in then any retracement would be OK too. Thanks for your comment.
Reply
Ideas Scripts Chart
United States
United Kingdom
India
España
Italia
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Billing Sign Out