GBP/USD – 1.3390
Original strategy :
Bought at 1.3410, Target: 1.3600, Stop: 1.3350
Position: – Long at 1.3410
Target: – 1.3600
Stop: – 1.3350
New strategy :
Exit long entered at 1.3410,
Position: – Long at 1.3410
Target: –
Stop:-
Although cable rebounded from 1.3371, as renewed selling interest emerged at 1.3461 and sterling has slipped again, suggesting near term downside risk remains for the retreat from 1.3550 (last week’s high) to bring retracement of recent rise, hence weakness to 1.3330-35, then 1.3300 cannot be ruled out, however, reckon downside would be limited to 1.3250-60 and previous support at 1.3221 should remain intact, bring rebound later.
In view of this, would be prudent to exit long entered at 1.3410 and stand aside in the meantime. Only above said resistance at 1.3461 would suggest low is possibly formed, bring rebound to 1.3500, break there would signal the pullback from 1.3550 has ended and revive bullishness for retest of this level first. Looking ahead, a break of 1.3550 would extend the rise from 1.3027 low to 1.3595-00, however, reckon recent high at 1.3658 (Sept high) would hold from here due to near term overbought condition, 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.
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.
