GBPUSD Elliott Wave Analysis -- 1st May, 2015

We are updating the main count according to the latest price action and it is worth noting that the latest downwards movement is not as clear as we would have preferred and therefore we are adding an alternate count which explores the possibility of further decline for Cable.

At this stage, both counts have equal probabilities and as always we will wait for either count`s confirmation point to be reached to determine the highly probable count.

Main Hourly Count

– Invalidation Points: 1.5053
– Confirmation Point: 1.5398 — 1.5499
– Upwards Targets: 1.5601
– Wave number: v pink
– Wave structure: Motive
– Wave pattern: Impulse/Ending Diagonal

Alternate Hourly Count

– Invalidation Points: 1.5053 — 1.5398
– Confirmation Point: 1.5114
– Downwards Targets: 1.5103
– Wave number: iv pink
– Wave structure: Corrective
– Wave pattern: Double Zigzag

Main Daily Wave Count

This count expects that primary wave B maroon is complete as a zigzag labeled intermediate waves (A), (B) and (C) black and that primary wave C maroon is unfolding towards the downside.

Within wave C maroon intermediate wave (1) black is likely complete as an impulse labeled minor waves 1 through 5 blue and intermediate wave (2) black has started unfolding towards the upside.

Wave 1 blue unfolded as a leading diagonal labeled minute waves i through v pink.

wave 2 blue unfolded as a zigzag structure labeled minute waves a, b and c pink.

Wave 3 blue unfolded as an impulse labeled minute waves i through v pink.

Wave 4 blue unfolded as a triangle labeled minute waves a through e pink.

As far as MACD study goes, We can see the start of a bearish divergence on the daily MACD as MACD is starting to register higher highs while price action did not follow suite.

This count would be initially confirmed by movement above 1.5499 and the final confirmation point is at 1.5553 .

At 1.5569 wave (2) black will reach 0.382 the length of wave (1) black and at 1.6189 wave (2) black will reach 0.618 the length of wave (1) black.

This count would be invalidated by movement above 1.7193 as wave (2) black may not retrace more than 100 % the length of wave (1) black. As well, this count would be invalidated by movement below 1.4566 as within wave A blue within wave (2) black no second wave may retrace more than 100 % the length of the first wave.

Main Hourly Wave Count

This count expects that minor wave (1) black is complete and that wave (2) black has started unfolding towards the upside.

Wave 5 blue unfolded as an impulse labeled waves i through v pink.

Wave iii pink unfolded as an impulse labeled waves (i) through (v) green.

Within wave (2) black, it is expected that wave A blue is unfolding towards the upside as an impulse labeled waves i through v pink with waves i through iii pink likely complete and wave iv pink is underway.

Wave i pink unfolded as an impulse labeled waves (i) through (v) green.

After the completion of wave i pink, wave ii pink unfolded as zigzag towards the downside labeled waves (a), (b) and (c) green.

Wave iii pink unfolded as an impulse labeled waves (i) through (v) green.

Wave (iii) green unfolded was an extended third wave labeled waves i through v orange.

Wave ii orange unfolded as a zigzag labeled waves A, B and C purple.

Wave iii orange unfolded as an impulse labeled waves 1 through 5 purple.

Wave iv orange unfolded as a zigzag labeled waves A, B and C purple.

Following the completion of wave (iii) green, wave (iv) green unfolded as a zigzag labeled waves a, b and c orange.

To complete wave iii pink, wave (v) green unfolded towards the upside as an impulse labeled waves i through v orange.

Wave iv pink is likely complete as a double zigzag labeled waves (w), (x) and (y) green. The subdivisions within wave (y) green are not as clear as we would have preferred, the alternate count covers the possibility of an incomplete wave (y) green.

This count would be initially confirmed by movement above 1.5398 and the final confirmation point is at 1.5499.

At 1.5601 wave v pink will reach equality with wave i pink.

This count would be invalidated by movement below 1.5053 as wave iv pink may not enter price territory of wave i pink and it should be noted that the invalidation point will be moved to the end of wave iv pink once we have confirmation on the hourly chart that wave v pink is unfolding towards the upside.

Alternate Hourly Wave Count

The difference between both main and alternate counts is within the subdivisions of wave (y) green within wave iv pink. This count expects that wave iv pink has more to offer towards the downside.

Wave iv pink is expected to be unfolding as a double zigzag labeled waves (w), (x) and (y) green with waves (w) and (x) green complete and wave (y) green is unfolding towards the downside.

Wave (w) green unfolded as a zigzag labeled waves a, b and c orange.

This count would be confirmed by movement below 1.5114.

At 1.5103 wave iv pink will reach 0.618 of wave iii pink.

This count would be invalidated by movement below 1.5053 as wave iv pink may not enter price territory of wave i pink and as well this count would be invalidated by movement above 1.5398 as within wave (y) green no B wave may retrace more than 100 % of an A wave.