Elliott Wave Daily

Trade Idea: GBP/USD - Hold short entered at 1.2750


GBP/USD – 1.2799

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 down

Original strategy :

Sold at 1.2750, Target: 1.2600, Stop: 1.2810

Position: - Short at 1.2750
Target:  - 1.2600
Stop: - 1.2810

New strategy :

Hold short entered at 1.2750, Target: 1.2600, Stop: 1.2810

Position: - Short at 1.2750
Target:  - 1.2600
Stop:- 1.2810

As sterling staged a strong rebound after finding support at 1.2690 last week, suggesting further consolidation would be seen, however, as long as resistance at 1.2818 holds, bearishness remains for another decline, below said support at 1.2690 would add credence to our view that the rebound from 1.2635 has ended at 1.2818, bring weakness towards said support at 1.2635 but break there is needed to confirm recent decline from 1.3048 top has resumed for retracement of recent upmove to 1.2600, having said that, downside should be limited to 1.2550 and reckon previous support at 1.2515 would hold.

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 upside, expect recovery to be limited and bring another decline. Only above said resistance at 1.2818 would defer and risk a stronger rebound to 1.2860-70 would but price should falter below 1.2900, bring another selloff later.