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GBP/CHF Elliott Wave Analysis Print E-mail
Elliott Wave Weekly | Written by Action Forex | Mar 05 13 11:32 GMT

GBP/CHF – 1.4276

GBP/CHF – Wave v ended at 1.1470 and major correction has commenced with A leg ended at 1.5486, B leg may bring weakness to 1.3500.

As the British pound has rebounded after early anticipated resumption of decline to 1.3967, suggesting a minor low is formed there and consolidation above this level would be seen with initial upside bias for retracement to 1.4360-65 (38.2% Fibonacci retracement of 1.5005-1.3967) and possibly towards 1.4485-90 (50% Fibonacci retracement), however, reckon previous resistance at 1.4542 would limit upside and bring another decline later. A break below 1.4150 would bring test of 1.4090-95 but only break of 1.4045-50 would signal the rebound from 1.3967 has ended and bring resumption of recent decline for retest of 1.3967, then the decline from 1.5486 as major B leg correction may extend to 1.3950-55 (38.2% Fibonacci retracement of entire rise from 1.1470 to 1.5486) and possibly towards 1.3800.

To recap the larger degree count, the selloff from 2.4967 (July 2007) is the beginning of wave V with circle and is labeled as 1: 2.3763, 2: 2.4429, wave 3 extension ended at 1.5122 (sub-divided into i: 2.3490, ii: 2.4209, iii: 1.9605, wave iv: 2.0359 and wave v: 1.5122). Our preferred count remains that wave 4 from 1.5122 has ended at 1.8114 with a: 1.7486, b: 1.5849 and wave c at 1.8114.

Under this count the decline from 1.8114 is the wave i of 5 and our latest preferred count treated this wave i ended at 1.5828, followed by wave ii at 1.7076, indicated downside target at 1.2300 and 1.2000 have been met and the rebound from 1.1470 suggests the wave v as well as entire wave 5 has ended there, hence at major correction has commenced with first leg ended at 1.5486 as wave A, wave B is now in progress which should be limited to 1.3000-05 (61.8% Fibonacci retracement of 1.1470-1.5486), bring eventual C leg rally in later part of 2013 to psychological resistance at 1.6000.

On the upside, above 1.4600 would defer and risk correction towards previous support at 1.4690-00, only break there would dampen this bearish view and signal low is possibly formed, risk a stronger rebound to 1.4770, then 1.4830-40 but strong resistance at 1.5005 should remain intact.

Recommendation: Look to sell sterling again at 1.4540 for 1.4200 with stop above 1.4640.

On the Monthly chart, the longer-term count is that major downtrend is under way with circle wave I at 2.8645 (Sep 1.978), then wave II with circle at 4.6178 (Feb 1981), the wave III with circle ended at 1.7424 (Nov 1995) and followed by wave IV with circle at 2.4967 (July 2007 with a short wave C) and wave V with circle is taking place. The wave 3 and 4 of V ended at 1.5122 and 1.8114 respectively and fall to 1.1000 is underway.


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