GBP/USD – 1.3341
Original strategy :
Bought at 1.3260, Target: 1.3450, Stop: 1.3200
Position: – Long at 1.3260
Target: – 1.3450
Stop: – 1.3200
New strategy :
Hold long entered at 1.3260, Target: 1.3450, Stop: 1.3330
Position: – Long at 1.3260
Target: – 1.3450
Stop:- 1.3330
As cable found renewed buying interest at 1.3221 yesterday and has rallied, reinforcing our bullishness for recent erratic rise from 1.3027 low to extend further gain to 1.3450, however, near term overbought condition should limit upside and price should falter below 1.3470, bring 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 could have ended at 1.3658.
In view of this, we are holding on to our long position entered at 1.3260. Below 1.3330 would defer and risk weakness to 1.3290-00 but still reckon downside would be limited to 1.3250-60 and said support at 1.3221 should remain intact, bring another rise 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.
