Price has made significant Low at 20th August 2021.
Extreme low has given us beautiful Impulsive structures.
Wave Nature: Motive wave
Type of motive wave: Impulse (Five waves)
Wave Nature: Corrective waves
Type of corrective pattern: Irregular or Expanded flat.
Retracement of wave ((2)): 50% of wave ((1)).
Wave Nature: Impulse (3rd wave can only be an Impulse with 5 waves)
Extension of wave ((3)) :
At this motion, price is riding on sub-wave (3) of wave ((3)).
Wave has an extension of ((3)) 161.8%, but the party is not over yet.
We are to get waves (4) and (5) of wave ((3)). One can expect 2.618% of wave ((3)) and even more!
Sub-waves of wave ((3)) :
Wave (1) is an impulse.
Wave (2) is an irregular flat.
Wave (3) is an impulse.
Extension: 161.8% of wave 1
The price extension of wave (3) is 161.8%. If the price breaks the 1.39154 level without any correction, we will have a powerful extension.
According to rules of alternation, if the second wave seems flat & time-consuming, then wave four can be sharp and quick.
We may get a running triangle or a zigzag correction.
Common Retracement: 38.2% of 3rd wave at 1.38305
50% of 3rd wave at 1.38101
61.8% of 3rd wave at 1.37924
50% retracement for wave 4 is acceptable for two reasons:
1. An Important support level is the 1.38107 – 50% retracement level of Wave 3.
2. Wave 4 is more often complete nearby the sub-wave (4) of wave ((3)).
If the price breaks the hurdle line, we will have a violation of the rule. However, wave two can never overlap the starting point of wave 1.
If the 3rd wave will crossover 161.8% of retracement extension without correction into wave (4), then we will have a powerful price extension for sub-wave (3) of wave ((3)) or after wave 4.
I will reveal the next move of GBPUSD in the short timeframe analysis soon. Therefore, stay connected.
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