GBP/USD – 1.2939
Original strategy :
Buy at 1.2900, Target:1.3050, Stop: 1.2840
New strategy :
Buy at 1.2880, Target:1.3080, Stop: 1.2820
Cable’s retreat after Friday’s brief rise to 1.2996 suggests minor consolidation would be seen and pullback to 1.2900-05 cannot be ruled out, however, reckon downside would be limited to 1.2880 and as long as support at 1.2852 holds, prospect of another rise remains, above 1.2996-00 would add credence to our view that low has been formed at 1.2774 and extend the corrective rise from there for retracement of recent decline from 1.3269 to resistance at 1.3032, then towards 1.3090-00 later.
In view of this, would be prudent to buy sterling on dips. Below said support at 1.2852 would defer and risk weakness towards 1.2800-10, however, only break of latter level would suggest the rebound from 1.2774 has ended instead, risk retest of this level, break there would extend the selloff from 1.3269 top to 1.2750, then towards 1.2700-10 later.
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.