Home Forex Technical Analysis Forex Elliott Wave GBPCAD Advances in a Double-Three Pattern

GBPCAD Advances in a Double-Three Pattern

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Overview

The GBPCAD cross advances in a sideways sequence corresponding to an incomplete double-three pattern. The mid-term Elliott Wave view foresees a potential rally that could boost the cross toward last March’s highs.

Market Sentiment

The mid-term market sentiment overview of the GBPCAD cross unfolded by the 90-day high and low range and illustrated in its daily chart, reveals the price action moving in the bearish sentiment zone (SZ).

The previous chart reveals the sideways movement bounded between the extreme bullish SZ located at 1.76759 and the extreme bearish SZ at 1.69214. Likewise, the 60-Day moving average looks flat, suggesting the balance between supply and demand, or bull and bear traders, which in turn, is indicative of sideways action.

On the other hand, considering the year’s opening price at 1.71923, we distinguish that the yearly candlestick pattern corresponds to a narrow body candle identified as a doji, revealing the next direction’s market participants’ indecision that the price will take.

In consequence, while the GBPCAD cross remains moving mostly sideways, the primary bias will continue neutral.

Elliott Wave Overview

The long-term Elliott Wave landscape of the GBPCAD cross reveals the price action is developing an incomplete three-wave sequence of Intermediate degree labeled in blue, which currently advances its wave (B). The internal structure unfolds in a double-three pattern as it exposes the next weekly chart on a log scale.

The previous chart reveals that the double-three pattern in progress looks incomplete. According to the Elliott wave theory, this complex formation follows an internal structural series subdivided as 3-3-3. In this context, the GBPCAD cross advances in its last “three” or the third component of the double-three pattern identified as wave Y of Minor degree labeled in green.

The internal structure of wave Y subdivided into another “three” sequence, which advances in its wave ((b)) of Minute degree labeled in black. Likewise, the wave ((b)) follows the arrangement of a triangle pattern. Thus, the GBPCAD cross should develop an upward movement subdivided into five-waves, corresponding to its wave ((c)) of Minute degree identified in black.

Elliott Wave Outlook

Considering the progress of the GBPCAD cross into a triangle pattern, the following 12-hour chart unveils that the price completed its wave ((b)) with the failure of reaching a new lower low at 1.69014, where the cross began to advance in an upward sequence that corresponds to its wave ((c)) of Minute degree identified in black.

The previous chart illustrates the end of the wave (e) of Minuette degree identified in blue and the upward sequence of a potential leading diagonal pattern, which could follow a 5-3-3-3-3 internal sequence. Simultaneously, the price seems to be advancing in its fifth wave of Subminuette degree labeled in blue, which belongs to the first wave of Minuette degree in blue. 

The first impulsive wave of Minuette degree could find resistance in the supply zone between 1.73665 and 1.74341, from where the cross could start to retrace until the demand zone is located between 1.71151 and 1.70262. Once GBPCAD completes its second wave, the third wave could become the upward cycle’s extended wave. This upward movement could drive the pair toward 1.77356 and continue until 1.79911.

The bullish scenario’s invalidation level locates at 1.69014, which coincides with the wave’s origin ((c)) that remains in progress.

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