GBP/USD – 1.2886
New strategy :
Buy at 1.2845, Target:1.3045, Stop: 1.2785
Position: –
Target: –
Stop:-
Although cable’s retreat from this week’s high of 1.2979 has kept price under near term pressure and initial downside risk remains for weakness to 1.2840-50, if our view that low has been formed at 1.2774 is correct, downside should be limited and 1.2800-10 should hold, bring another rebound later, above 1.2940-5- would signal the retreat from 1.2979 has ended, bring another bounce to this level, above there would add credence to this view and extend the corrective rise from 1.2774 low for retracement of recent decline from 1.3269 to 1.3000 and possibly towards resistance at 1.3032.
In view of this, would be prudent to buy sterling on further fall. Below 1.2800-10 suggest the rebound from 1.2774 has ended instead, risk retest of this level, break there would extend the selloff from 1.3269 top to 1.2750, then towards 1.2700-10 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.
