Sunday, July 1, 2012

GBPUSD Scenarios

For the past year or so, we have been waiting for GBPUSD to complete the 4th wave triangle and head lower. Here is the weekly chart.
However, wave e of the triangle can take any shape itself. It could be a flat or a triangle. Below are the two scenarios from daily perspective that show a possibility of wave e developing as a triangle.

It doesn't really mater if wave e turns out to be a flat or a triangle, the result will be the same, but the duration of forming a triangle would be longer.  A break of 1.51 would signal that wave e is done and we are on the way down to 1.40.  Just as a side note, if wave e of the weekly triangle turns out to be a flat, we might go above 1.63 before crashing down. In any case, a break of 1.51 is needed to signal that the triangle formation on the weekly time frame is over and we are headed much lower.

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