FX.co ★ GBP/USD Elliott Wave Count for January 25, 2012

Market Overview
GBP/USD has continued with bullish mood this week, the yesterday trading session has brought this major pair to a new 2 weeks’ high at 1.5628, where GBP/USD has found strong resistance and started pushing lower, today we see the continuation of bearish market and price testing 100EMA Support at 1.5530. After Prelim GDP q/q drop 0.1% of expected -0.1% We saw price starting to rise to 1.5580, but we expect to see continuation of short term down trend in New York session and price under 1.5500.

Support and Resistance
(S3)1.5501 (S2)1.5536 (S1)1.5558 (PP)1.5594 (R1)1.5629 (R2)1.5651 (R3)1.5687

Important News
(GBP) MPC Meeting Minutes
(GBP) Prelim GDP q/q
(GBP) BBA Mortgage Approvals
(GBP) Index of Services 3m/3m
(GBP) CBI Industrial Orders Expectations
(GBP) ECB President Draghi Speaks
(USD) Pending Home Sales m/m
(USD) Crude Oil Inventories
(USD) FOMC Statement
(USD) Federal Funds Rate
(USD) FOMC Press Conference
(ALL) WEF Annual Meetings

Elliott Wave Analysis for GBP/USD

GBP/USD has finished corrective wave a in 3 sub-waves (A,B,C on the Chart) at 1.5627.
According to our wave rules and assuming that wave b will finish at 50-61,8% of wave a, we can project our targets with Fibonacci extension (1.5232-1.5627) to levels between 1.5431 and 1.5383, for protecting our loss we can use end of wave c as stop loss level at 1.5627.

Trading Forecast
Based on Elliott Wave Rules we can expect the trend to go lower today. That is why we can come to a conclusion that we should open a Short position at 1.5540 with Stop Loss at 1.5627 with Take Profit 1 at 1.5431 and Take profit 2 at 1.5383