Hey pips! Hope you bagged plenty of pips last week. Not that the cable was trending. Far from it. However, the market is never short of opportunities. GBPUSD was not in my prioritized list of instruments for trading yet. As ya’ll know, the cable is in a huge correction since July. Nevertheless, if you have been following my forecasts, you probably were in the right side of the market for most part.
So last weeks price action literally negated the possibility of ABC ZigZag structure. However the ABC flat is still a possibility. Now the current bearish move has to be either the wave-D of the triangle or part of the impulse that breaks out of the correction. Frankly, I am quite biased towards the triangle completion. This is just my opinion though. By all means, please feel free to disagree. After all, I don’t hold a magic wand nor a crystal ball.
Yes, I have moved around the labeling a bit from the last weeks 4-hour snapshot. But it does not change the overall forecast, not previous ones, nor this week.
Last week included quite a bit of manipulative price action with plenty of news flashes to trap traders to both sides. This is a method of resetting the market, flushing out all the tidbits hanging around. I am speaking about the Primary wave-4 and 5 (green.) To me, this is smart money building up a long position. Wave-4 once again proved to be the sucker’s wave and rolled over to complete the last hurrah – wave-5.
So now what? Now is the time where patience pays multiple folds of dividends.
We now have a grip of the market in terms of:
- Corrective structure and the pattern in play
- Current phase of price within the corrective pattern
- Forecast of short, medium and long term expectation
- Direction of the market
On top of those points we have MACD divergence to support the next wave-E of the triangle.
So why wait now? Simple, let the market confirm to our expectation and forecast. Let it make the first move! Remember the alternative possibility of the current bearish move completely breaking out of the structure? Well, the confirmation is just to exclude that possibility and be more confident in the trade.
My short/medium-term bias changes from short to long. The transition from wave-D to wave-E begins. But that does not mean that I will jump onto long positions just yet. Interesting price action around the bottom boundary of the triangle coinciding with MACD divergence is quite tempting though. And to top it off, we have a clear 5-wave structure for the wave-C of Cycle ABC. Technically everything points towards one conclusion – that the presumed wave-D is complete. What’s your trade plan for GBPUSD next week?