GBP/USD – 1.2735
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 1.2675, stopped at 1.2735
Position: – Short at 1.2675
Target:Â –
Stop: – 1.2735
New strategy :
Stand aside
Position: –
Target:Â –
Stop:-
As sterling has surged again today, dampening our near term bearishness and suggesting a temporary low has been formed at 1.2589 earlier this week, hence upside risk remains for this rebound from there to bring retracement of recent decline, above 1.2758 would encourage for further gain to 1.2800, then test of resistance at 1.2818 but break there is needed to provide confirmation that recent decline from 1.3048 has ended at 1.2589, then headway to 1.2850-60 would follow.
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 1.2675-80 and support at 1.2640 should hold, bring another rebound later. Only a drop below 1.2640 would suggest the rebound from 1.2589 has ended, bring retest of this level, break of this support would revive bearishness and signal recent decline from 1.3048 top has resumed for retracement of early upmove to 1.2550, then towards previous support at 1.2515.
