GBP/USD – 1.3373
New strategy :
Despite falling marginally to 1.3302, lack of follow through selling on break of previous support at 1.3303 and the subsequent rebound to 1.3419 (Monday’s high) suggest further choppy trading would be seen, however, a break above said resistance is needed to suggest low has possibly been formed, bring a stronger rebound to 1.3450 but only break of resistance at 1.3466 (last week’s high) would confirm and bring further subsequent gain to 1.3500 and later towards 1.3521. Only a break of 1.3521 would suggest the correction from 1.3550 has ended, bring retest of this level later. Looking ahead, a break of 1.3550 would extend the rise from 1.3027 low to 1.3595-00, however, reckon recent high at 1.3658 (Sept high) would hold from here due to near term overbought condition, 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.
On the downside, whilst pullback to 1.3330-35 cannot be ruled out, said support at 1.3302 should remain intact, bring another rebound later. Only a drop below said support at 1.3302 would revive bearishness and extend the fall from 1.3550 for retracement of recent rise to 1.3250-60 but previous support at 1.3221 should remain intact, bring 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.