GBP/USD – 1.3285
Original strategy :
Sold at 1.3195, stopped at 1.3255
Position: – Short at 1.3195
Stop: – 1.3255
New strategy :
As sterling has surged yesterday and broke above previous resistance at 1.3279-87, dampening our bearishness and gain towards resistance at 1.3338 cannot be ruled out, however, as broad outlook remains consolidative, reckon upside would be limited to 1.3390-00, price should falter well below resistance at 1.3455, bring another decline later.
In view of this, would not chase this rise here and would be prudent to stand aside for now. Below 1.3260-65 would bring pullback to 1.3220-25 but only break of 1.3195-00 would signal top is formed instead, then further choppy trading within recent range would take place and weakness to 1.3150 and possibly 1.3117 would follow. 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.