Tuesday, July 19, 2016

Gbpcad: What's The Extent of This Rally?

Price , for 68 months, rallied in a long impulse wave which ended around December 2015 after which a correction took off. This correction has already lasted for 7 months and I think the bullish move may commence for a long period.

The correction, if completed at this level, is a zigzag pattern resting at crucial Fibonacci zone.

It's important to get closer to the chart and see the sub-waves of these large waves as shown in the chart below.


The requestion remains : "have we seen the bottom of the correction or price will dip deeper?'' . The C-wave of the zigzag is a 5-wave drive and so we preferred the labelling above which shows that the present rally is the sub-wave 4 of C.

The projection of this wave is shown by the chart below.

The chart above makes it look like the sub-wave 4 is a zigzag pattern and its b-wave is a triangle pattern. The triangle b-wave  of sub-wave 4 can be shown below.

The chart below shows a clearer look at the triangle and its sub-waves.


A further drive to 1.7060-1.71 is expected and market is expected to be contained at this level. A bridge below this level and 1.7027 will render the contrasting triangle invalid.

If price is contained above 1.7027 and breaks the triangle upside, a rally move to 1.7715 is very likely before we would look for more short opportunities.

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