GBP/USD – 1.3341
New strategy :
Buy at 1.3260, Target: 1.3450, Stop: 1.3200
As cable has maintained a firm undertone after breaking above indicated resistance at 1.3338, adding credence to our view that a possible upside break of recent established broad range has occurred, hence upside bias remains for the erratic rise from 1.3027 low to extend further gain to 1.3400, however, near term overbought condition should limit upside and price should falter below 1.3470, bring 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 could have ended at 1.3658.
In view of this, we are looking to buy cable on pullback as 1.3250-60 should limit downside and bring another rise later. Below support at 1.3209-13 would defer and suggest top is possibly formed, bring correction to 1.3150-60 and then 1.310 but reckon 1.3100 would hold, bring another rebound 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.