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

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.

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

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter