GBP/USD – 1.3144
Original strategy :
Sell at 1.3170, Target: 1.3000, Stop: 1.3230
New strategy :
Sell at 1.3195, Target: 1.3030, Stop: 1.3255
As sterling has recovered after falling to 1.3070 on Friday, suggesting minor consolidation above this level would be seen, however, reckon upside would be limited to 1.3200 and bring another decline later, below said support would add credence to our view that the rebound from 1.3027 has ended at 1.3338, then a retest of 1.3027 would follow, having said that, 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 1.3200 should limit upside and bring another decline later. Above 1.3240 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.