Early this morning I suggested that the 5th wave will extend. Why? Typically, at least one impulse wave in a five-wave sequence will experience an extension. As the first and third waves were of normal proportions, we were on the lookout for the 5th wave to extend. However, what we were unsure about was how deep that extension could take us. We were however optimistic about a nice recovery back to 1.5060/70 area once the extension is finished. So far the GBP/USD has declined to 1.4935, and everything points towards further losses. Yet, I would like to warn you not to get carried away with an extreme bearish view at this stage of the progression. When a fifth wave extends, we should be ready for a swift recovery back to the 2nd wave of the fifth. That recovery may involve a double retracement, ie we could get an initial rally, then a retest of the low, and then another stronger rally. But be prepared for some interesting moves ahead that is going to crush a lot of traders who are not alert to this phenomenon. We will take a look again tomorrow. Ramki