GBP/USD – 1.3160
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 :
Bought at 1.3145, Target: 1.3345, Stop: 1.3085
Position: – Long at 1.3145
Target: – 1.3345
Stop: – 1.3085
New strategy :
Exit long entered at 1.3145,
Position: – Long at 1.3145
Target: –
Stop:-
Despite yesterday’s brief rise to 1.3269, the subsequent sharp selloff after BOE signals top has been formed there, hence consolidation below this level would be seen and near term downside risk is for test of 1.3097 support, break there would add credence to this view, bring retracement of recent rise to 1.3070 support, then towards 1.3052, however, near term oversold condition should limit downside and reckon support at 1.2999 would hold.
In view of this, would be prudent to exit long entered at 1.3145 and stand aside for now. Above 1.3190-00 would bring recovery to 1.3220-30, however, said resistance at 1.3269 should remain intact, bring another retreat later. Only a break of 1.3269 would signal recent upmove has once again resumed and extend headway in the final wave v of larger degree wave C to 1.3300-10 but reckon upside would be limited to 1.3340-50 and price should falter below 1.3390-00, then sterling shall retreat sharply from there.
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.
