Trade Idea: GBP/USD - Sell At 1.6530

GBP/USD - 1.6415

Most recent candlesticks pattern : N/A

Trend : Sideways

Tenkan-Sen level : 1.6412
Kijun-Sen level : 1.6534
Ichimoku cloud top : 1.6423
Ichimoku cloud bottom : 1.6395

Original strategy : Sell at 1.6475, Target: 1.6320, Stop: 1.6530

New strategy is : Sell at 1.6530, Target: 1.6380, Stop: 1.6585

Despite falling to 1.6323 yesterday, the British pound recovered from there on cross-unwinding versus Japanese yen and the candlestick on the 4 hour chart at 1.6323 with a relatively long lower shadow suggests temporary low has been formed and it is quite likely that we may see cable to rebound back to the Kijun-Sen (now at 1.6534 and is also the 50% Fibonacci retracement of 1.6745), however, we still expect the calculated resistance at 1.6584 (61.8%) would cap upside for now and bring another decline later. A break below 1.6323 would extend the decline from 1.6745 top towards 1.6274 (50% Fibonacci retracement of 1.5803 to 1.6745) but support at 1.6231 should contain downside and strong support area at 1.6187-1.6209 would hold.

In view of this, whilst we are still looking to sell cable, we have raised our short entry to 1.6530 but one must not overly bearish unless we see a break of the 1.6187 support. In case sterling rises above 1.6584, this would signal the first leg of correction from 1.6745 top is over, then rebound to 1.6640/50 cannot be ruled out but indicated top at 1.6745 should continue to cap upside