GBP/USD – 1.2954
Recent wave: Wave V of larger degree wave (III) has ended at 1.1986 and major correction has commenced from there for gain to 1.3000 and 1.3140-50
Trend: Near term up
Original strategy :
Sold at 1.2920, Target: 1.2770, Stop: 1.2970
Position: – Short at 1.2920
Target: – 1.2770
Stop: – 1.2970
New strategy :
Hold short entered at 1.2920, Target: 1.2770, Stop: 1.2970
Position: – Short at 1.2920
Target: – 1.2770
Stop:- 1.2970
Although cable has rebounded again and marginal gain from here cannot be ruled out, outlook remains consolidative and reckon upside would be limited, bring another retreat, below 1.2900-10 would bring test of indicated support at 1.2866, break there would signal the rebound from 1.2844 has ended, bring another test of this level, below there would extend the corrective fall from 1.2991 for retracement of recent rise to 1.2831, then towards 1.2770-75 but previous support at 1.2757 should hold from here.
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.
On the upside, above 1.2965-70 would signal the pullback from 1.2991 has ended, bring retest of 1.2991 later, only above there would revive bullishness and extend recent upmove to 1.3040-50 but overbought condition should limit upside to 1.3075-80 and price should falter below 1.3100. We are keeping our view that the wave c as well as larger degree wave B has ended at 1.2109, hence impulsive wave C has commenced from there with wave i of C ended at 1.2616, follow by a correction to 1.2365 (end of wave ii) and wave iii rally is unfolding.
