EWM Interactive | Oct 20, 2014 01:12AM ET
On September 23rd we gave you our short-term outlook on GBP USD in an article, called “Intraday Weakness for GBPUSD Rate”. The chart below gave us enough reason to “expect more weakness”, because we had a perfect 5-3 Elliott Wave cycle on it and, according to the theory, the trend should resume in the direction of the five-wave sequence.
Recommended reading: GBPUSD, Not As Optimistic As It Seems
That is why it brings the same meaning as a regular five-wave impulse. Every impulse is followed by a three-wave correction in the opposite direction. Here, the leading diagonal should be followed by one such correction. If this is the correct count, we may see a temporary recovery in GBP USD before the larger downtrend resumes.
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