GBPJPY
GBPCHF
GBPAUD
Commentary – We maintain that a correction is underway that can not be considered complete until a rally through 212.39, although a test of the former 4th wave at 217.31 is possible. Near term we see two possibilities. One is that a triangle is unfolding as wave b of larger Y. In this case, a terminal thrust into 217.31 would complete the correction and give way to the larger downtrend. The other possibility is that the b wave ends up as a flat; under this count, price would come below 209.39 before a rally into the 217.00 area takes place. In summary, there is too much uncertainty right now to take a stand so we will wait for the selling opportunity near 217 (or higher).
Strategy – Flat
Visit our recently updated GBPJPY Currency Room for specific resources geared towards this currency.
Commentary – We wrote last week that “expectations then are for a rally through at least 2.1809 and possibly a test of the former 4th wave at 2.2137.” The GBPCHF did rally but failed just shy of 2.1800. Still, a larger recovery seems reasonable, especially given that the pattern unfolding now looks like an inverse head and shoulders.
Strategy – Move to flat
Commentary – We have been bearish this pair for a long time now and although we do expect price to continue declining longer term, a bigger bounce is probably due after one more low is registered (below 2.1689). The rally from 2.1689 is in 3 waves, which is why a new low is expected, but the decline will be in a 5th wave (in a bearish cycle from the November high at 2.3887), which is why we expect a bigger bounce to follow.
Strategy – Bearish, against 2.2739, EXIT after a decline below 2.1689 (our long standing target has been 2.0700…which is still possible)
Questions about these or any other counts? Discuss Elliott wave counts on any pair at the DailyFX Elliott wave forum.
