Elliott Wave Count On The GBP/USD Currency Pair

Per reader request, I wanted to share a possible Elliott Wave interpretation for the British Pound/US Dollar FOREX currency pair.  Even if you don’t trade FOREX, you can use this as an example of a near ideal Elliott Wave pattern unfolding.  Below is an internally valid wave count that ends with an interpretation:

GBPUSD FOREX:

Click for larger image

Bear in mind that this is technically a Corrective Pattern after a multi-year impulse up, so the larger structure probably should be labeled A, B, C instead of 1, 2, 3, and I will describe how these counts would be different.

First, if this is an “ABC” Correction, then instead of a 1, we would have an “A”, and instead of a 2, we would have a “B” and we would currently be in the “C” Wave Down.  Under this interpretation, one could argue that the Corrective Phase has ended with the C wave completing 5 waves and now we’re perhaps in a brand-new impulse yet to be determined.

Under the 5-wave impulse view - which I’ve labeled above - then we perhaps have another leg down to go to complete the 5th wave and enter a corrective phase back up.  We may currently be in fractal 2 (perhaps starting fractal 3) of the terminal 5th wave, meaning two swings down are yet to come.

Keep in mind that Elliott Wave analysis is fractal in nature, meaning each larger wave subdivides into smaller waves, and while - for me at least - it’s easy to label smaller waves, sometimes it’s more difficult to provide the exact count on the larger structure (which seems backwards, but I start with the fractal and build upwards while I suppose others start with the large-scale and conform downwards - both should arrive at similar results but both methods have their faults and strengths).

What I’m trying to do with these posts on Elliott Wave examples is not so much try to predict the future, but rather show you examples of how to sub-divide waves into the proper fractal forms and demonstrate that the Wave Principle divides larger waves into internally valid smaller ‘fractal’ waves.  I’m also trying to take Elliott into real-time examples in terms of wave labeling.

Currently, we appear to be in a corrective phase, and we might even be forming a triangle (perhaps expanding diagonal) of some sort, wherein we can label “abcde.”

Though there are certainly alternate counts, it would appear to me that we are in a corrective pattern currently and most likely have at least one if not more ‘legs’ (swings) down, which would be bearish for the British Pound and Bullish for the US Dollar.

Again, the point of this post is to show internally valid Elliott Wave fractals that comprise a larger picture - the more examples we see and practice, the better Elliotticians we will become.

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