GBP/USD – 1.2700
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 :
Sell at 1.2820, Target: 1.2620, Stop: 1.2880
Position: –
Target: –
Stop: –
New strategy :
Sell at 1.2820, Target: 1.2620, Stop: 1.2880
Position: –
Target: –
Stop:-
As the British pound recovered after holding above indicated support at 1.2635 (last week’s low), retain our view that further consolidation above this level would be seen and another bounce to 1.2780 cannot be ruled out, however, reckon upside would be limited to 1.2820-30 and bring another decline, below said support at 1.2635 would extend recent decline from 1.3048 for retracement of recent upmove to 1.2600 but near term oversold condition should limit downside to 1.2550 and reckon previous support at 1.2515 would hold from here.
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 upside, expect recovery to be limited to 1.2780-90 and 1.2830 should hold, bring another decline. Above 1.2860-70 would defer and suggest low is possibly formed instead, risk a stronger rebound towards 1.2900 but price should falter well below this week’s high at 1.2978 and bring another decline later.
