GBP/USD Elliott Wave Analysis
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Technical Analysis of Financial Market, Foreign Exchange analysis, Profesional trader.
12:10 AM
Our preferred count on the daily chart is that the major decline from 2.1162 top (9 Nov, 2007) is a 5-waver with wave 1: 1.9337, 2: 2.0399, extended wave 3 has ended at 1.3500 and wave 4 is an (A)-(B)-(C) correction which may bring further gain to 1.7180 but upside should be limited to 1.7333 (equality of wave (A)), bring decline in wave 5 later this year or in 2015.
On the downside, a break of said support at 1.6952 would defer and suggest top is possibly formed and risk correction to previous resistance at 1.6845-50, break there would add credence to this view and bring retracement to support at 1.6693-99, below this level would confirm, then further fall to previous support at 1.6660 and 1.6600 would follow.
Recommendation: Hold long entered at 1.7050 for 1.7250 with stop below 1.6950
Longer term - Cable's rise from 1.0520 (Feb 1985) to 2.0100 (September 1992) is seen as [A], the decline to 1.3682 is labeled as (B) and (C) wave rally has ended at 2.1162 (9 Nov, 2007) which is also the top of larger degree wave B with circle. The selloff from there is a 5-waver with wave 3 ended at 1.3500 (23 Jan 2009), wave 4 itself is possibly unfolding as either a triangle or an (A)-(B)-(C) and upside should be limited to 1.7333, price should falter below 1.7500 and bring another decline later. Below support at 1.6460 would suggest top is possibly formed, bring test of another previous support at 1.6252 but a sustained breach below there is needed to confirm, bring further fall to 1.6000, then towards support at 1.4814 (2013 low). Looking ahead, once this level is penetrated, this would signal wave 4 is over, then further decline towards 1.4228 support would follow, break there would signal the wave 5 has commenced for weakness to 1.3800, then retest of 1.3500 support.
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