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Saturday, 2 March 2013

GBP/USD Daily & Weekly Update

The reasons why I think wave 1 might be over and now cable need corrective bounce before further continuation in wave 3 are:
- five waves down  from 1.6300 high. Wave 5 is expdanded.
- bullish divergence on H4 and Daily timeframe on Awesome Oscilator, RSI and MFI
-gap is not fully covered
- typical for wave 5 over-throw from acceleration channel on H4
- Fibonacci Time Cluster on 04.03.2013 with highest score between 04:00 - 12:00.
- support from Gann Fan line on Weekly chart
-Gortzel Cycle algorythm is pointing upward
- COT Sentiment futures  data suggest that commercial hedgers had inceresed the long posions over large speculators and small traders

The reasons why I think there might be one more wave down (about 130pips are):
-market must confuse everyone
-last wave down might be wave (iii) of (5) due to no bullish divergence on H1 yet
- 61% Fibo expansion @ 1.4877 might be hit before bounce
 -Weak Reverse (1/8) level @ 1.4892 might be hit before reverse

Nevertheless,  one should try to buy some GBP/USD with tight stop.

In bigger view, if wave 1 is finished then the min retracement could reach previous wave four of a lesser degree and this one is @ level 1.5313 that is very close to the 23.6%Fibo retracement.

The suggested pattern of wave 2 correction is 5-3-5 ZigZag simple correction if 23%Fibo will hold as a top of wave 2 or WXY Double ZigZag if 23% will be broken to the upside.

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