GBP/USD – 1.2779
Recent wave: Wave V of larger degree wave (III) has ended at 1.1986 and major correction has commenced from there for gain to 1.3000 and 1.3140-50
Trend: Near term up
Original strategy :
Buy at 1.2750, Target: 1.2950, Stop: 1.2690
New strategy :
Buy at 1.2710, Target: 1.2910, Stop: 1.2650
As cable has retreated after faltering below resistance at 1.2847, suggesting another leg of corrective fall from 1.2907 top is underway and weakness to 1.2757 (38.2% Fibonacci retracement of 1.2515-1.2906) is likely, however, reckon 1.2710 (50% Fibonacci retracement as well as 100% projection of a leg from1.2906) would limit downside and bring another rise later, above said resistance at 1.2847 would suggest the pullback from 1.2906 has ended instead, bring further gain to 1.2870, then retest of 1.2906. We are keeping our view that the wave c as well as larger degree wave B has ended at 1.2109, hence impulsive wave C has commenced from there with wave i of C ended at 1.2616, follow by a correction to 1.2365 (end of wave ii) and wave iii rally is unfolding, hence further gain to 1.2940-50 and possibly psychological resistance at 1.3000 would be seen, however, near term overbought condition should limit upside to 1.3050-60.
Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200.
On the downside, whilst initial pullback to 1.2750-55 is likely, reckon downside would be limited and 1.2700-10 (50% Fibonacci retracement of 1.2515-1.2906) should contain weakness and bring another rally later. Below 1.2690-00 would defer and risk correction to 1.2660-65 but another previous resistance at 1.2616 (wave i top) should remain intact.