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GBP/USD Update (1/31) – Short-term Elliott Wave Count; Butterfly Pattern?
Written by article default Monday, 31 January 2011 17:38
GBP/USD
- The inflation talk in the UK has pushed the cable higher despite poor underlying economic figures.
- Today’s price action broke above projected pattern resistance and 78.6% retracement of the decline from 1.6050 to 1.5750.
- The rally is strong, and should complete a butterfly pattern at 1.6050, at which point, there should be some resistance.
- The 1H chart below shows us we are in a wave (3), or alternately could be c. Looking at the 4H chart, and seeing we are likely in a wave 5, the current wave is likely a wave (3), and we are in the near-term in wave (iii) of that wave. That means we have some further swings likely towards 1.61 area. The 4H chart, shows one scenario with a diagonal triangle forming as the market completes an impulse wave to 1.61. (the internal waves in a triangle type terminal impulse wave can overlap, as seen in the 1H chart)
- The 1H chart shows a possible resistance zone just above 1.6050, with some extended fibonacci retracement levels.
- This would be where the butterfly would be complete and a decline should ensue towards 1.59, after which another rally should then end the terminal wave near 1.61.
- Further break above 1.61, has 1.63 in sight.
