The chart above shows The developing impulse in GBP/USD since summer 2015
W]ave (I) is labelled as a
Wave (II) is a short 3 wave correction which is to be expected after a .
Wave ( III ) is an extended wave which itself subdivides into 5 waves. Wave ( III ) also equals 1.618 wave (I)
Wave (IV) takes the form of a . It has retraced into the territory of the 4th wave of a lesser degree, into resistance and also into base channel resistance. In addition, also turned lower from the 60 level which is resistance in a bear trend.
We now look to be in the process of making wave (V) down. As wave ( III ) was extended expect wave (V) and wave (I) to tend towards equality. Wave (V) = Wave (I) at 1.3612 and therefore this is the first target
This is a drilled down chart of the developing wave (V)
Five wave impulse can be counted and so has been labelled as wave 1 of (V).
We are now working on wave 2 of (V). A three wave move has already been made and labelled as wave a. This rules out the possibility of a (as this is a 5, 3, 5 correction) and a triangle can only form in waves 4, b or X. Therefore, it is expected that this move will take the form of a which is a 3, 3, 5 move. We have already has the first 3 waves and are working on the second 3 (as per the green a, b and c. Once this is complete a 5 wave move is expected that will form wave c and this should move into the purple shaded area (wave 4 of a lesser degree) and also completes the correction
The next move should be a wave 3 of (V) and hence a sharp move lower. I will be waiting for the correction to complete before entering on a break of 4 of c with a stop just above the end of c and a target of 1.4612. I will post an update as this develops.