GBPUSD saw a sharp bearish impulse on Friday the 24th after the release of Brexit referendum results of the previous day.
GBPUSD Wave counts for each degree from Monthly chart to 15 Min. chart
GBPUSD Weekly Elliott wave count
It is assumed that the b wave of abc correction of the Supercycle is complete at – 1.71915. So the market is currently in wave C of the Supercycle. However the personality of wave 1 of the lower degree (Cycle) does not have a crystal-clear 5 wave structure, especially at this bird’s-eye-view. So for this reason GBPUSD has a very credible alternate count which suggests the b wave of the Supercycle is still underway and not yet complete.
However, our preferred count still is the one on the above image.
Longer term expectation of waves:
Grand Super Cycle – Y of WXY correction (currently underway)
Super Cycle – C of ABC ZigZag correction (currently underway)
Cycle – 3 of 12345 impulse (possibly completed at last week’s low as assumed in this count)
GBPUSD Daily Elliott wave count
Breaking down the 3rd wave of Cycle degree, count of a 5 wave impulse is possible. So at this point, the next wave in line according to this forecast is the 4th wave of Cycle degree. However, GBPUSD is currently in a tricky situation. Because, according the alternate count, if wave B of Supercycle is still in progress, the market could also provide an impulsive bullish move. In which case, this count will be invalidated. So the difference really is the personality of the upcoming bullish move.
Either way the medium term expectation is bullish.
Medium term expectation of waves:
Primary – 5th wave completion (assumed to have completed at last weeks low,) then a corrective structure within the wave 4 of the Cycle degree.
GBPUSD 4 Hour Elliott wave count
Intermediate degree count contains a leading diagonal as wave 1, which is a rare occurrence. Immediate future for the GBPUSD holds plenty of choppiness in the market. It does really makes sense in terms of economic state of the country as well, especially after the Brexit referendum and the decision to exit the EU.
Note the red and the blue lines in the image where the red line specifies the start of wave 2 and the end of wave 1 in the Cycle degree. Since the choppy market expected ahead is actually the 4th wave of Cycle degree, the price should not breach the red line. Else this count will be invalidated.
The blue line at the bottom specifies the end of A wave of the Supercycle. It has no value with regard to the Elliott waves or the wave principle. It is preferred that overall C wave of the Supercycle ends well below the blue line, because the A wave of the Supercycle was far more impulsive than the ongoing C wave. Although its not a rule of the Wave principle, personality and the pattern of various wave structures hold important clues to guide the count in the right direction.
Short/Medium term expectation of waves:
Intermediate – This will either be the start of 3-wave or 5-wave structure depending on the correction of the Supercycle degree.
Here is the snapshot of the GBPUSD alternate count on the weekly chart.