Weekly Waves 19 September: GBP/USD, Gas and Bitcoin

5 min read

Hi Traders,

Our weekly Elliott Wave analysis reviews the GBP/USD 4 hour chart, the Gas 4 hour chart, and the Bitcoin crypto currency weekly chart.

GBP/USD Bears Take Control and Break Bottom

The GBP/USD made a bullish retracement to and bearish bounce at the 38.2% Fibonacci resistance level:

  1. The GBP/USD bounce at the 38.2% Fib indicates a wave 4 (pink) pattern.
  2. Price action has now broken below the bottom after a strong bearish decline, which has been labeled as a wave 1 (yellow).
  3. Price action is expected to continue with its downtrend (red arrows) as part of a wave 3 (yellow).
  4. The main targets are the Fibonacci levels at 1.1325, 1.1250, and 1.1175. 
  5. Eventually a shallow retracement is expected to occur within wave 4 (yellow). 
  6. The retracement should not break above the previous bottoms and resistance zones (red boxes).
  7. A further decline is then expected within wave 5 (yellow).
  8. A bullish push above the resistance levels makes it likely that another wave pattern is valid.

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NGAS Head and Shoulders Pattern Indicates Reversal 

The NGAS 4 hour chart is showing a reversal chart pattern:

  1. The NGAS chart offers a classical head and shoulders reversal chart pattern (orange boxes).
  2. The bullish push up within wave B/2 stopped at the 61.8% Fibonacci level.
  3. The bearish decline after the bearish bounce has been very strong and is likely some type of wave 3 (yellow).
  4. A mild retracement within the wave 4 (yellow) could take price eventually back to the 23.6% or 38.2% Fibonacci levels. 
  5. A deeper bullish retracement invalidates the wave 4 (yellow) pattern.
  6. A bearish continuation aims for the Fibonacci targets down below.
  7. If price action only reaches the -27.2% Fibonacci target, then it’s most likely a wave C ([pink). If price action goes to the -61.8% Fib, then it could be either a wave 3 or C.
  8. A break below the -61.8% Fibonacci level indicates a wave 3 (pink).

BTC/USD Breaks Low and Prepares for Decline

Bitcoin (BTC/USD) is breaking the bottom and low for a continuation of the downtrend:

  1. The BTC/USD bulls are disappointed yet again after a bullish rally was unable to break above the resistance zone.
  2. The break of the bottom should complete the bullish, shallow wave 4 (yellow) and start the bearish wave 5 (yellow).
  3. The main target is the -27.2% Fibonacci target around $12k with an important zone around the round level of $15k.
  4. The wave 5 (yellow) could move lower within a falling wedge reversal chart pattern (orange lines). 
  5. A strong bullish bounce is needed to confirm the start of any reversal (blue arrows)
  6. The wave 5 (yellow) would complete a wave C (pink) of wave W (pink) or wave 2 (gray).

Good trading,
Chris Svorcik

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