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 :
Sell at 1.3150, Target: 1.2980, Stop: 1.3210
Position: –
Target: –
Stop: –
New strategy :
Sell at 1.3150, Target: 1.2980, Stop: 1.3210
Position: –
Target: –
Stop:-
As cable has remained under pressure after recent selloff from 1.3269 top (last week’s high), adding credence to our view that top has been formed at 1.3269 and downside bias remains for this move to bring retracement of recent upmove, hence further weakness to support at 1.2999 is likely, break there would provide confirmation, 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.
