GBP/USD – 1.3375
Original strategy :
Sell at 1.3460, Target:1.3300, Stop: 1.3520
Position: –
Target: –
Stop: –
New strategy :
Sell at 1.3500, Target:1.3300, Stop: 1.3560
Position: –
Target: –
Stop:-
Although cable has retreated after meeting resistance at 1.3455, reckon support at 1.3343 would limit downside and risk of another rebound to said resistance cannot be ruled out, however, as a temporary top has been formed at 1.3658 is correct, upside would be limited to 1.3500 and bring another decline later, below said support at 1.3343 would add credence to this view, bring retracement of recent rise to 1.3300-10, having said that, near term oversold condition should limit downside to 1.3250 and reckon 1.3215-20 (50% Fibonacci retracement of 1.2774-1.3658) would hold from here, price should stay well above previous support at 1.3153, bring rebound later.
In view of this, we are looking to sell cable on recovery as 1.3500 should limit upside. Above resistance at 1.3514 would abort and signal the retreat from 1.3658 top has ended, risk a stronger rebound to resistance at 1.3571 but upside should still be limited to 1.3600 and price should falter well below recent high at 1.3658, bring another retreat later. Our preferred count is that (pls see the attached chart) the wave IV is unfolding as a complex double three (ABC-X-ABC) correction with 2nd wave B ended at 1.2774, hence 2nd wave C is unfolding and may extend further gain to 1.3650, then 1.3700, however, overbought condition should limit upside to 1.3770-75 and reckon 1.3800-10 would hold from here, bring retreat 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.
