Trade Idea : GBP/USD – Buy at 1.2855

GBP/USD – 1.2877

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.2887

Kijun-Sen level                    : 1.2901

Ichimoku cloud top              : 1.2925

Ichimoku cloud bottom        : 1.2914

Original strategy :

Buy at 1.2855, Target: 1.2975, Stop: 1.2820

Position : –

Target :  –

Stop : –

New strategy  :

Buy at 1.2790, Target: 1.2910, Stop: 1.2755

Position : –

Target :  –

Stop : –

As cable has finally retreated after rising to 1.2965 late last week, suggesting consolidation below this level would take place and initial downside risk is seen for correction to 1.2840-45, then towards support at 1.2805, however, reckon downside would be limited to 1.2790-95 (38.2% Fibonacci retracement of 1.2515-1.2965) and bring rebound later. Above 1.2910 resistance would bring test of 1.2937 but break there is needed to signal the pullback from 1.2965 has ended, bring retest of this level first, then towards 1.2990-00 (1.236 times projection of 1.2109-1.2616 measuring from 1.2365 and psychological resistance). 

In view of this, would not chase this rise here and would be prudent to buy cable on further subsequent pullback as downside should be limited to 1.2790-95. A drop below previous support at 1.2757 would abort and signal top is formed instead, bring correction to 1.2740 (50% Fibonacci retracement of 1.2515-1.2965) first.