GBP/USD: The Bearish Scenario
GBP/USD has for sure been on an impressive run to the upside for many months now, and it's worth to consider that a correction is underway, specifically Wave (IV) of 1.
Take notice of a few key points:
Remember, Wave 4 does not overlap with the price territory of wave 1 therefore, as long as GBP/USD remains above 1.26476, this setup remains valid.
The invalidation level (suggested stop-loss) is placed at 1.42504.
Overall, a very interesting setup that is worth considering.
Let us know your thoughts in the comments.
Your feedback is appreciated.
Thank you for reading!
Take notice of a few key points:
- Wave (III) is demonstrating a 1.618% Fibonacci extension of Wave (I), this is typical for a Wave 3 extension.
- The internal wave structure of Wave (III) is clearly counted as a 5 wave impulse move, suggesting that Wave (III) is complete.
- GBP/USD has broken the key channel trendline to the downside, an early sell signal (it's possible that GBP/USD will retest the trendline).
- If this Elliott Wave count is true, the correction projects to complete at the most common Fibonacci retracement level for Wave 4, 38.20% of Wave 3. It just so happens that 1.35000, a strong psychological round number, lines up with the 38.20% Fibonacci level.
Remember, Wave 4 does not overlap with the price territory of wave 1 therefore, as long as GBP/USD remains above 1.26476, this setup remains valid.
The invalidation level (suggested stop-loss) is placed at 1.42504.
Overall, a very interesting setup that is worth considering.
Let us know your thoughts in the comments.
Your feedback is appreciated.
Thank you for reading!
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