GBP/USD has consolidated after Brexit and the Flash Crash and unfolded as a WXY (red) Correction Pattern. This Formation involves a Double Zig-Zag which is most likely going to have a 3-3-5 Structure.
In order for the Retracement to complete and Cycle Wave IV (black) to complete, Primary Wave Y (red) still needs to commence, most probably as an Impulse, with 5 Waves on the up-side because of how Intermediate Wave (A) (orange) unfolded.
Target Measurements are provided by the Fibonacci Extensions of Intermediate Waves W & X (red) and they point out towards the Vibration Levels and Point of Interest, the Consolidation between Brexit and Flash Crash. As per one of the most powerful Elliott Wave Rules, Cycle Wave IV (black) is mot likely going to finalize in the price territory of Primary Wave 4 (light blue) from a lesser degree (Primary 4 in Cycle III (black)).
This Complex Formation also contains an Inverted Head & Shoulders Formation which is a Bullish Set-up as well.
Wave Y’s (red) Intermediate Waves ABC (orange) are unfolding as a Complex Formation. Intermediate Wave (B) (orange) is showing a ABCDE Contracting Triangle in Minor Wave B (blue) and should have a Break-out very soon, most probably on the downside in order to complete Minor Wave C and also complete the Right Shoulder. Then Primary Y (red) can start with sudden Bullish Swings.
IF Bearish Breach of the Contracting Triangle:
– watch for Flag retest of Triangle base right after the Breach
– wait for Minor C to finalize (3 moves)
GBP/USD – BUY – Entry Levels:
Aggressive – 1.2350 & 1.2300
SL – 1.2200
Moderate – 1.2200
SL – 1.2000
Conservative – 1.2100
SL – 1.1900
TP 1 – 1.2800
TP 2 – 1.3100
TP 3 – 1.3300
* IF imminent Bullish Breach of Triangle:
– watch for Flag retest on the Triangle Line