GBP/USD – 1.2732
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
New strategy :
Sell at 1.2800, Target: 1.2600, Stop: 1.2860
Position: –
Target:Â –
Stop:-
The British pound dropped sharply after UK election results, the breach of previous support at 1.2769 confirms top has been formed at 1.3048 earlier and revives our bearishness for the decline from there to bring retracement of recent upmove, hence further fall to 1.2630-35 and 1.2600 would be seen, however, near term oversold condition should limit downside to 1.2550 and reckon previous support at 1.2515 would 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, expect recovery to be limited to 1.2790-00 and bring another decline. Above 1.2850-60 would defer and suggest low is possibly formed instead, risk a stronger rebound towards 1.2900 but price should falter well below this week’s high at 1.2978 and bring another decline next week.
