GBP/USD – 1.2900
Original strategy :
Sold at 1.2910, Target: 1.2710, Stop: 1.2970
Position: – Short at 1.2910
Target: – 1.2710
Stop: – 1.2970
New strategy :
Hold short entered at 1.2910, Target: 1.2710, Stop: 1.2940
Position: – Short at 1.2910
Target: – 1.2710
Stop:- 1.2940
As cable opened higher earlier today, lack of follow through buying and the subsequent retreat from 1.2939 has retained our bearishness and as long as this level holds, bearishness remains for another retreat to 128.10-20, then retest of last week’s low at 1.2774, break there would extend recent selloff from 1.3269 top to 1.2750 but loss of downward momentum should prevent sharp fall below 1.2730-35 and previous support at 1.2706 should remain intact, bring rebound later,
In view of this, we are holding on to our short position entered at 1.2910. Above said resistance at 1.2939 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.
