GBP/USD – 1.3167
Original strategy :
Sold at 1.3315, met target at 1.3115,
Position: – Short at 1.3315
Target: – 1.3115
Stop: -
New strategy :
Stand aside
Position: –
Target: –
Stop:-
Sterling dropped again after meeting renewed selling interest at 1.3229 yesterday, our short position entered at 1.3315 met downside target at 1.3115 with 200 points profit, however, as cable has recovered again after falling to 1.3088 earlier today, suggesting consolidation would be seen and recovery to 1.3200 cannot be ruled out, however, reckon said resistance at 1.3229 would hold, bring another decline, below said support at 1.3088 would revive bearishness for resumption of recent decline towards recent low at 1.3027.
As we have taken profit on our short position entered at 1.3315, would not chase this fall here and would be prudent to stand aside for now. Above minor resistance at 1.3229 would prolong consolidation and bring another bounce to 1.3280-85 but indicated resistance at 1.3338 should hold from here, bring another decline. In the unlikely event sterling breaks above resistance at 1.3338, this would signal low has been formed at 1.3027 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.
