The reasons why I think wave 1 might be over and now cable need corrective bounce before further continuation in wave 3 are:
– five waves down from 1.6300 high. Wave 5 is expdanded.
– bullish divergence on H4 and Daily timeframe on Awesome Oscilator, RSI and MFI
-gap is not fully covered
– typical for wave 5 over-throw from acceleration channel on H4
– Fibonacci Time Cluster on 04.03.2013 with highest score between 04:00 – 12:00.
– support from Gann Fan line on Weekly chart
-Gortzel Cycle algorythm is pointing upward
– COT Sentiment futures data suggest that commercial hedgers had
inceresed the long posions over large speculators and small traders
The reasons why I think there might be one more wave down (about 130pips are):
-market must confuse everyone
-last wave down might be wave (iii) of (5) due to no bullish divergence on H1 yet
– 61% Fibo expansion @ 1.4877 might be hit before bounce
-Weak Reverse (1/8) level @ 1.4892 might be hit before reverse
Nevertheless, one should try to buy some GBP/USD with tight stop.
In bigger view, if wave 1 is
finished then the min retracement could reach previous wave four of a
lesser degree and this one is @ level 1.5313 that is very close to the
The suggested pattern of wave 2 correction is 5-3-5 ZigZag simple correction if 23%Fibo will hold as a top of wave 2 or WXY Double ZigZag if 23% will be broken to the upside.
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