GBP/USD – 1.2903
Original strategy :
Sell at 1.2950, Target: 1.2800, Stop: 1.3010
Position: –
Target: –
Stop: –
New strategy :
Sell at 1.2980, Target: 1.2815, Stop: 1.3040
Position: –
Target: –
Stop:-
As cable has rebounded after intra-day initial marginal fall to 1.2842, suggesting consolidation above this level would be seen and corrective bounce to 1.2950 is likely, however, reckon upside would be limited to 1.2980-90 and bring another decline, below said support at 1.2842 would add credence to our view that the selloff from 1.3269 top is still in progress and bearishness remains for this move to bring correction of early upmove, hence further weakness to 1.2812 support would be seen but near term oversold condition should prevent sharp fall below 1.2800 and reckon 1.2740-50 would hold on first testing, bring rebound later.
In view of this, would not chase this fall here and would be prudent to sell cable on recovery as 1.2980-90 should limit upside, above resistance at 1.3032 would defer and suggest low is formed, risk a stronger rebound to 1.3059 and possibly towards 1.3100 but previous support at 1.3112 (now resistance) should remain intact, bring another decline.
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.
