GBP/USD – 1.3027



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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



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Original strategy :
Sell at 1.3090, Target: 1.2890, Stop: 1.3150
Position: –


Target: –


Stop: – 



New strategy :
Sell at 1.3100, Target: 1.2900, Stop: 1.3160
Position: –


Target: –


Stop:- 


Although cable has retreated after meeting resistance at 1.3084 yesterday, reckon 1.2980-85 would limit downside and near term upside risk remains for another bounce to 1.3090-00, however, as long as indicated resistance at 1.3126 holds, prospect of a retreat remains, below 1.2980-85 would bring test of 1.2950-55, break there would signal the rebound from 1.2933 has ended, bring another test of this level, break there would add credence to our view and extend the fall from 1.3126 top to 1.2910-15, break there would provide confirmation, then further decline to 1.2870-80 would follow but reckon support at 1.2812 would remain intact. 

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 marginal gain above 1.3084 cannot be ruled out, price should falter below 1.3100 and bring another retreat later. A break above last week’s high of 1.3126 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.


