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Elliott Wave View: Further Downside in Pound SterlingElliott Wave View of Pound Sterling (GBPUSD) suggests the cycle from September 1 high remains incomplete. The decline from there is unfolding as zigzag Elliott Wave Structure. Down from September 1, wave (A) ended at 1.2761 and wave (B) ended at 1.3007. Internal of wave (B) unfolded as a double zigzag Elliott Wave structure where wave W ended at 1.2919, wave X ended at 1.2813, and wave Y of (B) ended at 1.3007 Pair has resumed lower and broken below wave (A) low suggesting the next leg lower in wave (C) has started. Wave (C) lower is currently in progress as an impulsive 5 waves. Down from wave (B), wave ((i)) ended at 1.2863, and wave ((ii)) bounce ended at 1.3. Pair then resumed lower in wave ((iii)) towards 1.2773, and wave ((4)) ended at 1.2824. The final leg lower in wave ((v)) ended at 1.2711. This move also ended wave 1 in higher degree. Wave 2 bounce has also ended at 1.2866 and pair has resumed lower in wave 3. Down from 1.2866, wave ((i)) ended at 1.2674, and wave ((ii)) ended at 1.2777. Near term, while bounce stays below 1.2866, expect pair to extend lower. Potential target lower is 100% – 123.6% Fibonacci extension of (A)-(B) at 1.211 – 1.222. Alternatively, wave 1 can end at 1.2674, and pair now can be in wave 2 rally to correct cycle from Wave (B) high on September 16 in larger 3, 7, or 11 swing before turning lower again.
by Elliottwave-Forecast
ridethepig | Oven Ready GBP Chart PackThe economic landscape and political development 📌 What the less advanced participants must know about the Brexit saga and economic development First a few reminders. We call the resistance area drawn across the first chart our ' Loading Zone ', and here the word 'loading' is used in a trading sense and not its progressive sense. The 1.23xx and 1.15xx are considered the 'absolute lows' in the current range (once again in a strictly trading sense). It is easy to find the centre, positioned where the scaffolding supports our price structure. By defining our centre, we have created technical borders around the price, in other words the map of our flows (1.35xx, 1.23xx and 1.15xx). 1️⃣ By political development, I mean the reckless retreat of UK market access in the short-term The procedure to return to WTO rules is the same as the advance towards the house of economic bondage; whether you want to argue about sovereignty or debate migration, the loss of market access in the immediate term will damage the UK real economy. No-deal Brexit is coming in October despite the political fairy dust and attempts from the Supreme Court to 'take back control'. A ruthless Downing Street hijacked the entire country and are at the wheel aiming to cause maximum pain to the economy in the near term with their edenistic view of rebuilding into 2030 and beyond. So "development" of UK exposure is not really in play for the next 1-2 or even 3 years, but the idea is much rather that UK assets should be redeveloped from lower levels. It is good - if I may say so - from a markets perspective with the spirit of volatility in mind. However, from a humanist and democratic perspective there is a major threat. For example, think how undemocratic it would be to break international laws, destabilise the union and undermine previous commitments (we are not talking about a Banana republic, rather the country of the Magna Carta!!). It's very difficult to find any Brexiteers on the ground that truly wanted no-deal - let alone support for Johnson. 2️⃣ The global economic landscape must not be considered in itself to be healthy, but rather simply an environment which helps politicians pass the blame. This is an important notion for all those following the covid dominos . The advance of Covid has given cover, where possible for politicians globally to develop counter arguments for nationalism without the criticism from the public. Because, as we have discussed together before, the end of the economic cycle is an unavoidable chapter in the sense that the economy, as with all things in life cycles naturally. For that reason, we should first position for a breakdown in the UK currency. The following chart demonstrates the unavoidable cycle down: Since the economic cycle down will last into 2021/2022, we may characterise the advances in equities as noise for our purposes as the equity market is not a reflection of the real economy via artificial CB intervention. Now the UK CFO, Rishi Sunak, can be seen like a deer in the headlights. The effect of years and years of policy mistakes? Tax hikes are coming, and the consumer will pick up the bill. On the cable front, sellers position is comfortable from the point of view that the macro direction and confidence in the public sector are blocked via NDB. A breakdown of the wedge would trigger flows towards the centre at 1.23xx and in addition, unlock 1.14xx and 1.05xx the 1985 lows. Invalidation for the bear case would only come from a breach of 1.35xx. So, we can rightfully continue to look for selling opportunities across UK assets, including the currency. Thanks as usual for keeping the feedback coming 👍 or 👎
Short
by ridethepig
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