FX.co ★ GBP/USD Wave Analysis for November 21, 2012

Wave Analysis:

Yesterday there were no changes in the wave structure of the GBP/USD pair. Meanwhile, the price movement above the figure 59, which is almost horizontal, could be considered to be a forming wave structure of up correction with regard to the whole assumed wave 3 (or C). If it is so, this correction looks almost completely. We can consider that down move resumes from 1.5945-1.5950 levels. Divergence of MACD points it out as well.

Targets for Down Wave 3 of C (if the wave becomes more complex):

1.5825 – 100.0% of Fibonacci
1.5799 – 61.8% of Fibonacci

Targets for Up wave 4 or 1 or a of new Uptrend (it will be revised):

1.5945 – 61.8% of Fibonacci
1.5973 – 76.4% of Fibonacci

Summary and Trading Recommendations:

The fact that the British pound remains uncertain and the complexity of wave structure give us reasons to consider that it is risky to hold positions on the market. Levels 1.5825 and 1.5799, which is corresponding to 100.0% and 61.8% of Fibonacci, are targets for expected downward move in terms of wave 3 or C of downtrend if it complicates its inner wave structure. After it is finished (or even now), up wave 4 or the first wave of new uptrend with targets 1.5945 and 1.5973, which is corresponding to 61.8% and 76.4% of Fibonacci, may start (or has started) its building. The pound continues moving mainly with three-wave structures. Divergence of MACD points out that down wave is ready to be built. The break of downward channel signifies either the beginning of building of a sideways correctional structure or beginning of building of a new uptrend. On the whole, the entire wave structure may change its outlook.