Trading GBP/USD with Elliott Waves and RSI

[throughthemud 10]

This chart shows my best count on the GBP/USD right now but I'm not highly confident in it. Form is always more important than your wave count so I will continue to monitor it for signs this analysis is incorrect.

 

This chart is of GBP/USD hourly with RSI-7. I have labeled the waves and drawn lines from the bottom of corrections to RSI.

 

Corrective waves develop in 3s so never determine the waves has ended until you see 3 subdivisions. Notice how RSI almost never gets oversold until that 3rd subdivision.

 

The last two areas I drew lines on seem to be inconsistent with this but notice that the first subdivision develops in 5 waves. This means the trend has either changed or it is only the first subdivision of wave (iv). My alternate count is that what I have labeled (i) and (iii) is actually (a) and © of a double zigzag. Time will tell but so far that looks less likely.

 

Lastly notice how overbought RSI was at the end of what I've labeled wave iii. This is pretty common for 3rd waves since they are usually extended. When this happens the 5th wave will not get as overbought even though it reaches a higher price extreme.

 

Thanks for reading. All comments and questions are appreciated.