GBP/USD – 1.2932
Recent wave: Wave V of larger degree wave (III) has ended at 1.1986 and major correction has commenced from there for gain to 1.3000 and 1.3140-50
Trend: Near term up
Original strategy :
Sold at 1.2955, stopped at 1.2910
Position: – Short at 1.2955
Target:Â –
Stop: – 1.2910
New strategy :
Stand aside
Position: –
Target:Â –
Stop:-
Although cable fell marginally to 1.2844, the subsequent stronger-than-expected rebound dampened our bearishness (our short position entered at 1.2955 stopped profit at 1.2910) and near term upside risk remains for test of resistance at 1.2949, however, a sustained breach above there is needed to signal the retreat from 1.2991 has ended, bring retest of this level, break there would extend recent upmove to 1.3040-50 but overbought condition should limit upside to 1.3075-80 and price should falter below 1.3100. We are keeping our view that the wave c as well as larger degree wave B has ended at 1.2109, hence impulsive wave C has commenced from there with wave i of C ended at 1.2616, follow by a correction to 1.2365 (end of wave ii) and wave iii rally is unfolding.
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.
On the downside, expect pullback to be limited to 1.2890-00 and said support at 1.2844 should remain intact, bring another rebound. Only a break of 1.2844 would revive near term bearishness and signal a temporary top has been formed at 1.2991 earlier, bring retracement of recent rise to 1.2770-75 but previous support at 1.2757 should hold from here. Â
