Trade Idea: GBP/USD – Sell at 1.3090

GBP/USD – 1.3040




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 1.3150, Target: 1.2980, Stop: 1.3210

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Target:  –



Stop: – 




New strategy :

Sell at 1.3090, Target: 1.2890, Stop: 1.3150

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Target:  –



Stop:- 



Although cable has recovered after falling to 1.2953 yesterday, suggesting minor consolidation above this level would be seen and recovery to 1.3055-60 cannot be ruled out, however, reckon upside would be limited to 1.3090-00 and bring another decline later, below said support at 1.2953 would extend the fall from 1.3269 top for retracement of recent upmove to previous support at 1.2933, break there would extend weakness to 1.2890-00 before rebound. 

In view of this, would be prudent to sell cable on subsequent recovery as previous support at 1.3112 should turn into resistance and cap upside. Only break of indicated resistance at 1.3165 would defer and suggest first leg of decline from 1.3269 has ended instead, risk a strong rebound to 1.3200, however, price should falter well below said resistance and bring another decline later.

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.