GBP/USD – 1.3045




Â
Original strategy :
Buy at 1.2880, Target:1.3080, Stop: 1.2820
Position: –
Target:Â –
Stop: – 



New strategy :
Buy at 1.2990, Target:1.3160, Stop: 1.2930
Position: –
Target:Â –
Stop:- 


As cable has surged again after finding renewed buying interest at 1.2909 yesterday, adding credence to our view that the fall from 1.3269 has ended at 1.2774 and mild upside bias remains for this move to bring retracement of the fall from 1.3269 to 1.3080 (61.8% Fibonacci retracement of 1.3269-1.2774), then 1.3120-25, however, near term overbought condition should limit upside and resistance at 1.3165 should hold from here, bring retreat later.Â
In view of this, would not chase this rise here and would be prudent to buy sterling on dips. Below 1.2955-60 would defer and suggest top is possibly formed, risk weakness to 1.2909 but only break there would add credence to this view, bring further fall to 1.2880 and later test of indicated support at 1.2852, however, as low has been formed at 1.2774, downside would be limited and 1.2800 should hold, bring another 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. 

