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GBPUSD – Falling 5 waves & an awaited upward correction

By:

Forexpros (Munther Marji )

2009-08-12 08:38:00 GMT

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Munther Marji

Mr. Munther Marji is the founder of The Technical Trader Analysis Services, which was founded in May 2003, and still generates technical analysis & forex signals on daily & weekly basis. He came to the world of forex as a broker in Dec 2000, .....

The Pound broke the support 1.6452 and dropped afterwards, reaching the first target 1.6378 successfully, but not really getting close to the second target 1.6270 (yesterday’s low 1.6311). We can see a very clear set of 5 waves falling from 1.6719 (as illustrated on the attached chart), that match all of Elliott waves rules. And if our wave count is correct, that means 2 things: first the first phase of the falling trend from 1.6719 is over, and that calls for an upward correction. And the second is that after that upward correction that matches the falling move, the falling trend will resume to new lows below 1.6311! Short-term support is Fibonacci 61.8% at 1.6377, and if broken the odds of falling below yesterday’s low will be enormous. Our targets for such a drop are 1.6270 & 1.6186. Whereas the resistance is at 1.6444, and breaking it would mean launching an upward correction that ideally targets 1.6515 & 1.6563.

Support:
• 1.6377: Fibonacci 61.8% for the short-term.
• 1.6270: Nov 27th low.
• 1.6186: Jun 18th low.

Resistance:
• 1.6444: Fibonacci 50% for the drop from 1.6484.
• 1.6515: Fibonacci 50% for the 5 falling waves from 1.6719.
• 1.6563: Fibonacci 61.8% for the 5 falling waves from 1.6719.

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