FX:GBPUSD   British Pound / U.S. Dollar
657 11 8
Or almost?

The pair missed touching the 0.7639 retrace level by a whisker Wednesday … resonable level to clock a reversal. The wave count I'm not 100% happy with but the very best I can do currently to make structural sense of a bit of a mess.

Scenario 1: the pair tucks itself down into a small ending diagonal pre FOMC, maybe touching down on 1.483, historically significant price level, as the market is reluctant to sell the dollar pre FOMC 16th December, and we can rearrange the minor a-b-c's blah … & shunt the end of the wave over to the right a little … prior to big 'events' things do tend to coil into triangles ...

Scenario 2: the pair has alrady completed the wave, and is waiting for the NFP today, and the markets have already decided sub- / semi- conciously the Fed will not be raising rates this year.

Scenario 3: my analysis is way off and something else might happen - e.g the five wave structure I've labeled C (circled) as the 3rd wave of B is in fact a lead diagonal.

Should it be correct and there is a significant break out to the upside, then the 0.618 equivalent to wave A would be a significant level at 1.573

In that the structure bears most similaity to a flat, 1.625x, of equal length to wave A (caps) seems a reasonable target

The wave type is not quite text book perfect, but should, I hope, end up, in sum A-B-C, like wave a (circled) of B, where the (b) wave reaches the 0.7639 and the (c) wave is a little over the length of wave (a), the 3-3-5 structure is retained and it forms a slightly wonky flat.

Fundamentals: a note – if the Fed don't raise rates, & the BoE following suit indicate at the top of this expected C wave 'neither will we' Sterling may fall as a bubble of hope / expectation is burst.

Indicators: GBPJPY             , GBPAUD             , GBPNZD             and this pair all show that divergence in the relative strength , which suggests Sterling is due for an upward thrust

DISCLAIMER: this is merely a view at this point in time, subject to alteration / improvement, and unless you happen to enjoy losing shed loads of money please manage risk etc. as if scenario 3 were possible, i.e all this is completely wrong.
Can you please post an updated chart of GBPUSD with latest count
Sure ... I will do in an hour or two ... or at least before market open, I hope.
+1 Reply
KayJay finitemonk
Thanks :)
Thanks for the chart. I like the way you use fibs to count waves. Brilliant stuff. I counted the whole correction as a combination of a ZigZag and a Triple three. Happy trading.
finitemonk fxmillions
Thanks, man. Yeah, using fibs to count waves is a good additional tool - at least I felt it improved my wave counts loads.

While Elliott Wave Internationals tutorial covers Fibonacci, there are a couple of good quick reference sites - one of the best is http://prognosis.nl/support/faq/principle/index.html

A second one is http://proelliottwave.com/free-elliott-wave-resources/elliott-wave-principle-basics/ ... Although this has some mistakes on it as far as I can make out, e.g on the Regular Flat it shows the c wave as having 3 not 5 waves as is my understanding. But, it is good at showing the normal and 'allowable' fib levels e.g a wave 4 normally retraces 0.236, more often 0.382 of wave 3 but it can retraces 0.5 or 0.618

Like most things it's a good guide but it doesn't always work.
fxmillions finitemonk
Yep, its much more clearer on hindsight... as usual. :)
It seems GU correction is not one yet. None the less, an impulse wave up is due soon. I guess we have to wait for the B (on a higher degree) wave to end.
You're right about the 3 waves on a C wave. But I learned my stuff @ elliottwave.com and it has corrective wave combinations, for example combos of flats, zigzags, triangles. Complex combos include double threes and triple threes, hence my interpretation of this correction.
I usually dont use Fibs to count waves but to determine SL and TP. Counting with fibs - food for thought I guess.
Thanks for the links and the tips btw.
finitemonk fxmillions
Currently I make 1.464 a potential significant level ... It was a big bounce back in March '15
hi, or maybe the last leg down you've marked (iv)-(v) is wave one of 5
finitemonk NidalDarawsheh
Yes, I think this is a possibility - see scenario 1.
+1 Reply
Congratulations! Your chart has been selected to be our highlighted post of the day! This is a great example of using Elliot analysis in a changing market environment.
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