If we look back to 1985 there should be no doubt that we can see that the British Pound had a huge single spike to the downside. 1985 was an important year for many of the currencies to make major turnings. All the currencies inside the USD index act inversely, so our wave counts have to do the same thing. Thinking upside down with the wave principle has to be pretty normal if we want a decent wave count. The last thing I have is a decent GBP wave count. What I want and what the market is going to give me are two different things. If the GBP gets close to the 1985 bottom will it be at a Cycle degree wave 5 bottom? I have my doubts at this time as the 2009 bottom may be the “A” wave in Primary degree location as well.
If a new low is going to happen then a plunging zigzag could be in progress. Below the commercials have been switching to the bullish side, while the speculators have done the opposite. Speculators are believing the bearish fundamental news, as they think this bearish trend is going to continue.
All fundamentals come in the form of “news” as the government shutdown clearly demonstrated to me.
These visual COT reports give us an idea as shorts and longs are clearly visible. The red lines are the long positions so I would be hesitant to take any position in the short term. Brexit remains the problem and until that gets resolved the GBP could be stuck in no man’s land for a little while longer.
Last week I still received one more Market Vane sentiment report that ranged between 34%-40% bulls, which are not some readings I can jump up and down about. Now if there were only 14% bulls in the survey, then that would be a different story. I refuse to give any long drawn out fundamental commentary as 1000’s of other analysts are paid full time to do that. Every time the GBP makes a move analysts will jump in and find you a reason why it moved.