Elliott Wave Daily

Trade Idea: GBP/USD - Buy at 1.2835


GBP/USD – 1.2906

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 :

Buy at 1.2870, Target: 1.3020, Stop: 1.2810

Position: -
Target:  -
Stop: -

New strategy :

Buy at 1.2835, Target: 1.3000, Stop: 1.2800

Position: -
Target:  -

As sterling has slipped again today, suggesting near term downside risk remains for the corrective fall from 1.3030 temporary top to bring retracement of recent upmove, hence weakness to previous resistance at 1.2861 (now support) cannot be ruled out, however, reckon 1.2830-35 (50% Fibonacci retracement of 1.2640-1.3030) would limit downside and bring another rise later, above 1.3000 would bring test of said resistance at 1.3030, break there would extend the rise from 1.2589 low towards recent high at 1.3048 but break there is needed to retain bullishness and bring subsequent headway towards 1.3090-00. 

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 initial pullback to 1.2900 is likely, reckon 1.2861 (previous resistance turned support) would limi downside and 1.2830-35 should hold, bring such a rise. Below support at 1.2794 would abort and signal top is formed instead, risk further fall to 1.2750, then towards 1.2706 support.