GBP/USD – 1.3284
Original strategy :
Sold at 1.3315, Target:1.3115, Stop: 1.3375
Position: – Short at 1.3315
Target: – 1.3115
Stop: – 1.3375
New strategy :
Hold short entered at 1.3315, Target:1.3115, Stop: 1.3375
Position: – Short at 1.3315
Target: – 1.3115
Stop:- 1.3375
Although cable rose to as high as 1.3338 on Friday, the subsequent retreat has retained our near term bearishness and as long as resistance at 1.3338-43 holds, mild downside bias remains for another retreat, below 1.3245 would bring weakness to 1.3195-00 but only break of said support at 1.3121 would signal the rebound from 1.3027 has ended, bring weakness to 1.3065-75, then retest of said support at 1.3027.
In view of this, we are holding on to our short position entered at 1.3315. Above previous support at 1.3343 would abort and signal low has been formed instead, bring at least a correction of the fall from 1.3658 top to 1.3390-00 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 could have ended at 1.3658.
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.
