GBP/USD – 1.3096
New strategy :
Sell at 1.3170, Target: 1.3000, Stop: 1.3230
Sterling ran into resistance at 1.3279 and has dropped sharply, price just broke below previous support at 1.3110 and 1.3088, signaling the rebound from 1.3027 has ended at 1.3338, hence bearishness is seen for retest of 1.3027, however, break there is needed to confirm early decline from 1.3658 top has resumed for further fall to psychological support at 1.3000 first.
In view of this, we are looking to sell cable on recovery as 1.3170-80 should limit upside and bring another decline later. Above 1.3220-25 would defer and prolong choppy consolidation, risk rebound to indicated resistance area at 1.3279-87 which is likely to hold from here. 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 could have ended at 1.3658.
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.