GBP/USD – 1.3558
Original strategy :
Buy at 1.3490, Target:1.3690, Stop: 1.3430
Position: –
Target: –
Stop: –
New strategy :
Buy at 1.3450, Target:1.3650, Stop: 1.3390
Position: –
Target: –
Stop:-
Although cable rise briefly to 1.3619 earlier today, lack of follow through buying on break of Friday’s high at 1.3617 and current retreat suggest consolidation below said resistance would take place and pullback to 1.3500-10 cannot be ruled out, however, reckon downside would be limited to 1.3440-50 and bring another rise later, above said resistance at 1.3619 would extend recent upmove to 1.3650-60, then towards 1.3700. We have re-labeled our preferred count (pls see the attached chart) that the wave IV is unfolding as a complex double three (ABC-X-ABC) correction with 2nd wave B ended at 1.2774, hence 2nd wave C is unfolding and may extend further gain to 1.3650, then 1.3700, however, near term overbought condition should limit upside to 1.3770-75 and reckon 1.3800-10 would hold from here, bring retreat later.
In view of this, would not chase this rise here and would be prudent to buy sterling on subsequent pullback as 1.3440-50 should limit downside. Below 1.3425-30 would defer and suggest a temporary top is possibly formed, risk correction to 1.3385-90 but previous resistance at 1.3329 should remain intact, bring another upmove 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.
