GBPUSD – Exploring Short Term Probabilities

This week the pound unfolded as expected towards the downside and the first specified target was reached and exceeded.

We are updating the main count according to the latest price action and as well adding an alternate count which expects upwards corrective movement.

It should be noted that MACD readings on the 8-hours chart does not provide enough data -at the time being- to confirm or refute the main count`s view.

As always we will let price action decide for us which count is the highly probable count.

8-Hours Main Count

- Invalidation Point: 1.6521
- Confirmation Point: 1.6460
- Downwards Target: 1.6454 -- 1.6367
- Wave number: 3 purple
- Wave structure: Motive
- Wave pattern: Impulse

8-Hours Alternate Count

- Invalidation Point: 1.6460 -- 1.6588
- Confirmation Point: 1.6521
- Upwards Targets: 1.6539 -- 1.6563
- Wave number: (4) aqua
- Wave structure: Corrective
- Wave pattern: Zigzag

Main Wave Count

This count expects that wave (C) black is likely complete and that wave (D) black is starting to unfold towards the downside.

Within wave (D) black, waves i and ii orange are highly likely complete and wave iii orange is starting to unfold towards the downside.

Wave i orange unfolded as a leading diagonal labeled waves 1 through 5 purple.

Wave ii orange unfolded as a triple zigzag labeled waves W, X, Y, X and Z purple with wave Z purple unfolding as a zigzag labeled waves (A), (B) and (C) aqua.

Within wave iii orange waves 1 and 2 purple are expected complete with wave 1 purple unfolding as an impulse labeled waves (1) through (5) aqua.

Wave 2 purple unfolded as a zigzag labeled waves (A), (B) and (C).

Within wave 3 purple waves (1) and (2) aqua are expected complete and wave (3) aqua is unfolding towards the downside.

Wave (2) aqua unfolded as a zigzag labeled waves A, B and C red with wave B red unfolding as an expanded flat correction.

Within wave (3) aqua waves 1 through 4 red are expected complete and wave 5 red is underway.

As far as MACD study goes, the lack of a MACD divergence on the 8 hours chart does not confirm or refute the main count`s view.

This count would be confirmed by movement below 1.6460.

At 1.6454 wave (3) aqua will reach 1.618 the length of wave (1) aqua and at 1.6367 wave 3 purple will reach 1.618 the length of wave 1 purple.

This count would be invalidated by movement above 1.6521 as within wave 5 red no second wave may retrace more than 100 % the length of the first wave.

Alternate Wave Count

The difference between both main and alternate counts is within the subdivisions of wave (3) aqua.

This count expects that wave (3) aqua is complete as an impulse labeled waves 1 through 5 red with wave 4 red unfolding as a triangle and therefore this count expects that wave (4) aqua is unfolding towards the upside.

This count would be confirmed by movement above 1.6521.

At 1.6539 wave (4) aqua will reach 0.382 the length of wave (1) aqua and at 1.6563 wave (4) aqua will reach 50 % the length of wave (1) aqua.

This count would be invalidated by movement above 1.6588 as wave (4) aqua may not enter the price territory of wave (1) aqua, as well this count would be invalidated by movement below 1.6460 as within wave A red within wave (4) aqua no second wave may retrace more than 100 % the length of the first wave.