Elliott Wave Daily

Trade Idea: GBP/USD - Stand aside


GBP/USD – 1.3000

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 :

Bought at 1.2995, stopped at 1.2935

Position: - Long at 1.2995
Target:  -
Stop: - 1.2935

New strategy :

Stand aside

Position: -
Target:  -

Although cable’s retreat from 1.3048 turned out to be much deeper than expected, as sterling found good support at 1.2889 and has staged another strong rebound, suggesting consolidation with mild upside bias would be seen and gain to 1.3020 cannot be ruled out, however, break of said resistance at 1.3048 is needed to signal upmove has resumed and extend further rise 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.

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 1.2975-80 is likely, reckon 1.2940-45 would limit downside and bring further consolidation. Only below said support at 1.2889 would signal top has been formed at 1.3048 and bring retracement of recent upmove to 1.2866, then towards previous support at 1.2844 which is likely to hold from here.