GBP/USD – 1.3055
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 :
Exit long entered at 1.3145,
Position: – Long at 1.3145
Target: –
Stop: –
New strategy :
Sell at 1.3150, Target: 1.2980, Stop: 1.3210
Position: –
Target: –
Stop:-
As cable met renewed selling interest at 1.3165 and has tumbled on Friday in part due to dollar’s broad-based rebound, suggesting top has been formed at 1.3269 last week and downside bias is seen for this move to bring retracement of recent upmove, hence further weakness to support at 1.2999 is likely, break there would add credence to this view, bring further fall to 1.2955-60, however, near term oversold condition should limit downside and reckon support at 1.2933 would hold on first testing.
In view of this, would be prudent to sell cable on recovery as said resistance at 1.3165 should cap upside, bring another decline. A firm break above this level would defer and suggest first leg of decline from 1.3269 has ended instead, risk a strong rebound to 1.3200, however, price should falter well below said resistance and bring another decline 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.
