GBP/USD – 1.2673
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 down
Original strategy :
Sold at 1.2675, Target: 1.2525, Stop: 1.2735
Position: – Short at 1.2675
Target: – 1.2525
Stop: – 1.2735
New strategy :
Hold short entered at 1.2675, Target: 1.2525, Stop: 1.2735
Position: – Short at 1.2675
Target: – 1.2525
Stop:- 1.2735
As sterling has rebounded after yesterday’s marginal fall to 1.2589, suggesting consolidation above this level would be seen, however, as long as previous support at 1.2723 holds, bearishness remains for another decline, below said support at 1.2589 would add credence to our view that recent decline from 1.3048 top has resumed for retracement of early upmove to 1.2550, then towards previous support at 1.2515 but loss of near term downward momentum should prevent sharp fall below 1.2490-00 and reckon 1.2450-60 would hold.
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 1.2700 and bring another decline. Above previous support at 1.2723 would defer and risk a stronger rebound to 1.2758 but break of this resistance is needed to signal a temporary low is formed instead, risk test of 1.2818 resistance later.
