GBP/USD – 1.3040
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 1.2835, met target at 1.3000
Position: – Long at 1.2835
Target: – 1.3000
Stop: –
New strategy :
Sell at 1.3080, Target: 1.2880, Stop: 1.3140
Position: –
Target: –
Stop:-
Although cable resumed recent rise as suggested in our previous update (we recommended to buy at 1.2835 and a long position was entered, indicated upside target at 1.3000 was met as well with 165 points profit) and rose to as high as 1.3126 yesterday, lack of follow through buying and the subsequent retreat suggest top is possibly formed and consolidation below this level is seen with mild downside bias for test of 1.3000-05, however, break there is needed to add credence to this view, bring retracement of recent rise to 1.2950, then towards 1.2870-80, however, reckon support at 1.2812 would remain intact, bring rebound 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 upside, whilst recovery to 1.3080-90 cannot be ruled out, price should falter below said resistance at 1.3126 and bring another retreat later. Break there would signal recent upmove is still in progress and may extend headway to 1.3150, then towards 1.3190-00 but loss of upward momentum should limit upside to 1.3250, bring another retreat later.
