Elliott Wave Analysis: Leading Diagonal on GBPUSD Point Lower
GBPUSD is still trading in a leading diagonal of a higher degree wave A), but this time in final stages of sub-wave 5. This means we believe upside can be limited for the pair in the near-term, ideally around the Fibonacci ratio of 161.8.
When diagonal triangles occur in the fifth or C wave position, they take the 3-3-3-3-3 shape that Elliott described. However, it has recently come to light that a variation on this pattern occasionally appears in the first wave position of impulses and in the A wave position of zigzags. The characteristic overlapping of waves one and four and the convergence of boundary lines into a wedge shape remain as in the ending diagonal triangle. However, the subdivisions are different, tracing out a 5-3-5-3-5 pattern.
structure is 5-3-5-3-5
a wedge shape within two converging lines
wave 4 must trade into a territory of a wave 1
appears in the wave one position in an impulse, in the A wave position of A-B-C
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