GBP/USD – 1.3365
Original strategy :
Sell at 1.3535, Target:1.3335, Stop: 1.3595
New strategy :
Sell at 1.3460, Target:1.3300, Stop: 1.3520
As cable has remained under pressure, suggesting the erratic decline from 1.3658 is still in progress and mild downside bias remains for this move to bring retracement of recent rise, hence further weakness to 1.3300-10 would be seen, however, near term oversold condition should limit downside to 1.3250 and reckon 1.3215-20 (50% Fibonacci retracement of 1.2774-1.3658) would hold from here, price should stay well above previous support at 1.3153, bring rebound later.
In view of this, we are looking to sell cable on recovery as 1.3450-60 should limit upside. Above resistance at 1.3514 would abort and signal the retreat from 1.3658 top has ended, risk a stronger rebound to resistance at 1.3571 but upside should still be limited to 1.3600 and price should falter well below recent high at 1.3658, bring another retreat later. Our preferred count is that (pls see the attached chart) the wave IV is unfolding as a complex double three (ABC-X-ABC) correction with 2nd wave B ended at 1.2774, hence 2nd wave C is unfolding and may extend further gain to 1.3650, then 1.3700, however, overbought condition should limit upside to 1.3770-75 and reckon 1.3800-10 would hold from here, bring retreat 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.