GBPCHF – Bearish Primary 5 – Trend Reversal

GBPCHF did provide a Bearish leg according to our previous post on “GBP/CHF – Bearish Trend – Cycle Wave V”  , however, the Structure developed a Complex Pattern, hence the reason why we think the Correction since Brexit and Flash-Crash is almost complete.
If correct, then we would expect a 1800 pips drop in GBPCHF in order to complete the entire Cycle.

Since Oct 2016 GBPCHF has been trading in a range, more exactly in a Complex Corrective Structure, a Double Three, which is about to end its shelf-life and pave the way to the next Impulse.

Weekly Chart (picture):

Cycle Wave V (black) – Wave Analysis:

• Primary Wave 1 (red) presents a sustained Bearish Swing which would lead a fellow Wave Trader to expect a similar Swing for Primary Wave 5 (red).
• Primary Wave 2 (red) retraced 50% of Primary Wave 1 (red) which would mean that Primary Wave 4 should not enter Primary Wave 1 (red) territory at all.
• Primary Wave 3 (red) presents an Extension in its Intermediate Sub-Waves, with Impulsive Intermediate Waves (3) & (5) black showing ”violent” moves caused by Brexit and Flash-Crash.
• Primary Wave 4 (red) presents the Complex Corrective Structure due to the Sharp Retracement in Primary Wave 2 (red) and due to the Law of Alternation having its effect.

Daily Chart (picture):

Primary 4 (red) – Wave Analysis:

• After the Flash-Crash, Intermediate Wave (W) (orange) started the Corrective Structure with a typical ”three” (3 swings), as per its Minor Sub-Waves ABC (light blue).
• Intermediate (X) (orange) unfolded with a Running Flat Pattern, as per its Minor Sub-Waves ABC (purple).
• Intermediate (Y) (orange) continued the Structure with its Minor Sub-Waves ABC (purple) unfolding their price action within the Rising Channel and showing a fake break-out in Minor B (purple), which would lead us to think that Minor C (purple) would find its end at or around Fibonacci Extensions.

Daily Interactive Chart:

4H Chart (picture):

Intermediate (Y) (orange) – Wave Analysis:

• Minor A (purple) unfolded with a typical 3 Wave Sequence under a Flat Structure, presenting a Complex Corrective Minute B (blue).
• Minor B (purple) presents a deep retracement, exceeding the start of Minor A (purple), thus paving the way for an Expanded Flat in Intermediate (Y) (orange) and the Extension in Minor C (purple).
• Minor C (purple) and Expanded Flat in Minute II (blue) and an Extension in Minute III (blue), as per its 5 Swings Sequence in Minuette Waves (black).
  Minute IV (blue) unfolded with a Complex Double Three, presenting a Triangle in Minuette (x) (red).
  Minute V (blue) is unfolding with an Ending Diagonal which is an indication for the Trend Reversal, also confirmed by the present Bearish Divergence.

4H Interactive Chart:

Fibonacci Projections and Speculation:

• Intermediate (Y) (orange) would end the Corrective Cycle for Primary 4 (red) at or around the 100% Fibonacci Extensions of Intermediates (W) & (X) (orange).
• Minor C (purple) would complete Intermediate (Y) (orange) at or around 161.8% or 200% Fibonacci Extensions of Minors A & B (purple).
• Primary 4 (red) is expected to end its Corrective Structure between 50 and 61.8% Fibonacci Retracements of Primary 3 (red).

GBPCHF – Bearish Primary 5 – SELL Positions:

• Aggressive Entry – 1.3300
• Moderate Entry – 1.3400
• Conservative Entry – 1.3500
• SL – 1.3700
• Targets – 1.2750 / 1.2400 / 1.2200 / 1.1900 / 1.1600

Safety Measures:

• When in the green, moving SL to break-even or in profit.
• If Moderate, waiting for Bearish Divergence confirmation at the upper Channel Trend-Line.
• If Conservative, watching the reactions at the 100% Fibs and looking for a Bearish outcome, then looking for Flag Formations.

Many pips ahead!

Download PDF Analysis:

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