Trade Idea: GBP/USD – Sell at 1.2910

GBP/USD – 1.2828





Original strategy :

Sell at 1.2910, Target: 1.2710, Stop: 1.2970

Position: –

Target:  –

Stop: – 




New strategy :

Sell at 1.2910, Target: 1.2710, Stop: 1.2970

Position: –

Target:  –

Stop:- 



As cable has remained under pressure after breaking below support at 1.2832, adding credence to our bearish view that the selloff from 1.3269 top is still in progress and downside bias remains for this move to bring at least a retracement of early upmove to 1.2800, then 1.2770-75, below there would extend weakness to 1.2750, however, near term oversold condition should prevent sharp fall below previous support at 1.2706, risk from there has increased for a rebound later. 

In view of this, would not chase this fall here and would be prudent to sell cable on recovery as said resistance at 1.2918 should limit upside, bring another decline. Above 1.2970-80 would defer and risk a stronger rebound to 1.3000 and possibly test of resistance at 1.3032, however, only break of latter level would abort and signal the fall from 1.3269 has ended instead, bring a stronger rebound to 1.3059 and possibly towards 1.3100 but previous support at 1.3112 (now resistance) should remain intact.

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.