Written by www.ew-forecast.com
GBPUSD has turned bearish exactly at wave A)=C) equality level where zig-zag usually forms a turning point. In fact, decline from above 1.5700 appears to be a leading diagonal which means it’s a first leg of a minimum three waves down. Ideally we will see a strong sell-off in black wave 3 after a complete corrective bounce in wave 2 that is now underway and should then find resistance around 1.5600 region. A minor reversal back to 1.5460 swing low would be an important evidence that bearish price action is already underway and ready to accelerate.
GBPUSD 4h Elliott Wave Analysis
Leading Diagonal Elliott Wave Pattern
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.