GBP/USD – 1.3112
Original strategy :
Sell at 1.3500, Target:1.3300, Stop: 1.3560
Position: –
Target: –
Stop: –
New strategy :
Sell at 1.3200, Target:1.3000, Stop: 1.3260
Position: –
Target: –
Stop:-
Cable dropped again last week, adding credence to our bearish view that the decline from 1.3658 top is still in progress and although price has recovered from 1.3027, reckon upside would be limited to 1.3175-80 and price should falter below previous support at 1.3222 (now resistance), bring another decline later, below 1.3060-70 would bring retest of 1.3027, break there would confirm the fall from 1.3658 top is still in progress, bring test of psychological support at 1.3000, then towards 1.2970 but reckon 1.2950 would hold on first testing due to loss of momentum.
In view of this, we are still looking to sell cable on recovery but at a lower level as 1.3200 should limit upside, bring another decline later. Above 1.3250 would suggest low is possibly formed, bring a stronger rebound to resistance at 1.3292 but still reckon another previous support at 1.3343 would cap upside, bring another selloff later. Our preferred count is that (pls see the attached chart) 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 could have ended at 1.3658.
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.
