GBP/USD – 1.3127
Original strategy :
Buy at 1.2990, Target:1.3160, Stop: 1.2930
New strategy :
Buy at 1.3040, Target:1.3200, Stop: 1.2980
As cable has rallied this week and broke above 1.13100 level, adding credence to our bullish view that the rise from 1.2774 is still in progress and bullishness remains for this move to extend further gain to 1.3200-10, however, as broad outlook remains consolidative, we are keeping our view that top has possibly been formed at 1.3269, reckon upside would be limited to 1.3230-40 and said resistance at 1.3269 should remain intact, bring retreat later.
In view of this, would not chase this rise here and would be prudent to buy sterling on subsequent pullback as support at 1.3033 should contain downside. Below previous resistance at 1.2996 (minor wave i top) would abort and signal top is formed instead, bring correction to 1.2950, then test of support at 2.2909, break there would confirm and correction to 1.2852 support would follow.
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.