Elliott Wave Daily

Trade Idea: GBP/USD - Buy at 1.2995


GBP/USD – 1.3027

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 1.2920, stopped at 1.2970

Position: - Short at 1.2920
Target:  -
Stop: - 1.2970

New strategy :

Buy at 1.2995, Target: 1.3150, Stop: 1.2935

Position: -
Target:  -

Current rally above indicated psychological level of 1.3000 confirms recent upmove has resumed and bullishness is seen for further gain to 1.3075-80, then 1.3100-10, however, near term overbought condition should limit upside to 1.3050-60 and price should falter well below 1.3100-10 today, risk from there is seen for a retreat to take place 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.

On the downside, whilst pullback to 1.2991 (previous resistance turned support) cannot be ruled out, reckon 1.2935-40 would contain downside and bring another uqmove later. Below 1.2935-40 would abort and suggest top is possibly formed, risk weakness to 1.2905-10, break there would confirm and bring subsequent fall to indicated support at 1.2866 but last week’s low at 1.2844 should remain intact.