The Gartley pattern did not playout as expected last week. But it wasn’t enough to warrant a change in the wave analysis. So the wave count stays the same. Although the market did not reverse at the 78.6% fib (to produce a perfect Gartley,) the pattern is still valid as price has not yet closed below 88.2%. However, the price has to reach a higher-high to complete the Intermeditae wave-C regardless of the validity of the Gartley pattern.
If you haven’t read last weeks forecast here it is – GBPUSD weekly outlook and Gartley forecast 08th-13th August 2016.
I assume the Minor C-wave is not yet complete; so the next possible reversal point is 1.272 fib extension plotted from the end of wave-B – around 1.28400 level. Note that although the Gartley pattern is still valid, the base reason to expect a long trade is not the pattern itself.
Long term expectation
Here is a reminder of the weekly wave analysis and the long term expectation for GBPUSD.
As you can see, there is plenty of room for bears. But be cautious as the market is in the Primary wave-4 correction, the price action will be mostly sideways; quite sharp back and forth waves are not uncommon in these conditions.
Plan of action
If you do not have a properly deviced and tested strategy for trading, there is not much you can do with forecasts. Regardless of how accurate and precise those forecasts could be. On the other hand, if you have a tested strategy to enter and exit trades:
- You could look for a short term long trade next week in anticipation of completing a simple ABC pattern as the Primary wave-4.
- At the completion of Primary wave-4 you could look for a long-term short trade as the Primary wave-5
As the market develops there will be more clues about the wave structure of Primary wave-4-correction and also regarding the end of the same correction. So there is no need to hurry and jump the guns. Sometimes a no trade is the best trade you can take.