GBPUSD – Is It Time Yet For An Upwards Correction !!

Last week, Cable unfolded as expected and targets were reached and exceeded.

We are updating the main count according to the latest price action and as well adding an alternate count which has a high probability anticipating the completion of wave 1 blue and that wave 2 blue is starting to unfold towards the upside.

As always we will wait for either counts confirmation point to be reached to determine the highly probable count.

6-Hours Main Count

- Invalidation Point: 1.6845

- Confirmation Point: 1.6657

- Downwards Targets: 1.6636 -- 1.6554

- Wave number: v pink

- Wave structure: Motive

- Wave pattern: Impulse/Ending Diagonal

6-Hours Main Count

- Invalidation Point: 1.7193 -- 1.6657

- Confirmation Point: 1.6845

- Upwards Targets: 1.6861 -- 1.6988

- Wave number: 2 blue

- Wave structure: Corrective

- Wave pattern: Zigzag

Elliott Wave chart analysis for the GBPUSD for 15th August, 2014. Please click on the charts below to enlarge.

Main Wave Count

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

Wave (C) black within wave B maroon unfolded as an impulse labeled waves 1 through 5 blue.

Wave 5 blue is complete as an ending diagonal labeled waves i through v pink.

Wave iv pink unfolded as a zigzag labeled waves (a), (b) and (c) green.

Wave v pink unfolded as a zigzag labeled waves (a), (b) and (c) green with wave (a) green unfolding as an impulses labeled waves i through v orange.

Within wave C maroon wave (1) black is expected to be underway with wave 1 blue at its late stages with waves i through iv pink complete and wave v pink is underway.

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

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

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

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

Within wave v pink waves (i) and (ii) green are expected complete and wave (iii) green is underway.

This count would be confirmed by movement below 1.6657.

Since wave v pink exceeded equality with wave i pink the next logical target is at 1.6636 as at that level wave v pink will reach 0.618 the length of wave iii pink and the second target is at 1.6554 as at that level wave (iii) green will reach equality with wave (i) green.

This count would be invalidated by movement above 1.6845 as wave (ii) green may not retrace more than 100 % the length of wave (i) green and it should be noted that the invalidation point will be moved to the end of wave (ii) green once we have confirmation on the hourly chart that wave (iii) green is underway.

Alternate Wave Count

The difference between both main and alternate counts is within the subdivisions of waves v pink as the alternate count expects that wave 1 blue is complete and that wave 2 blue is starting to unfold towards the upside.

This count would be confirmed by movement above 1.6845 and once wave 2 blue starts unfolding towards the upside we will be able to refine and tighten the confirmation point.

As far as MACD study goes, the presence of a bullish divergence supports the alternate count`s view that wave 1 blue is complete and that wave 2 blue is starting to unfold towards the upside.

At 1.6861 wave 2 blue will reach 0.382 the length of wave 1 blue and at 1.6988 wave 2 blue will reach 0.618 the length of wave 1 blue.

This count would be invalidated by movement above 1.7193 as wave 2 blue may not retrace more than 100 % the length of wave 1 blue and as well this count would be invalidated by movement below 1.6657 as within wave a pink within wave 2 blue no second wave may retrace more than 100 % the length of the first wave.