FX.co ★ GBP/USD Wave Analysis for December 14, 2012

Wave Analysis:

Yesterday the GBP/USD tried unsuccessfully to consolidate above the level of 1.6150. As a result it fell lower the level of figure 61. Thus, taking into account the fact that the pair has worked out targets convincingly both for wave 5 in particular and on the whole for the entire uptrend starting from the low of November 16, there is possibility that the outlined downswing will be more extended in the character. If it is so, it seems likely that the first possible target of the upward correction is the level of figure 60.

Targets for New Down Wave (probably 1 or a of a new downtrend):

1.6093 – 23.6% of Fibonacci
1.6043 – 38.2% of Fibonacci

Targets for Up Wave (presumably 5):

1.6171 and higher – 323.6% of Fibonacci

Summary and Trading Recommendations:

The British currency has worked out an upper line which forms bullish channel; it seems like it started building a correctional wave. The growth of the quotes may continue towards the target 1.6171 and higher which is corresponding to 323.6% of Fibonacci. If wave 5 of uptrend gets more complex, then it has to rise higher the channel. Targets for assumed downward move are the level of 1.6093 and 1.6043 which is corresponding to 23.6% and 38.2% of Fibonacci in terms of down wave (probably 1 or a). It is more likely. On the whole, the entire wave structure may be corrected. A small divergence of MACD warns about a possible retrace of the quotes in the downward direction towards the lower level, which forms a channel.