GBP/USD - 1.6298

Recent wave: wave c of 4 rally from 1.3655 (11 March 2009) formed a temporary top at 1.6664

Trend: Gyrations inside 1.5803-1.6664

Our trading strategy: Sell again at 1.6350, Target: 1.6190, Stop-loss: 1.6420

The British pound rose to as high as 1.6562 last Friday and then fell again due to dollar's renewed strength on safe-heaven demand, justifying our view that cable is going nowhere but gyrating inside the broad range of 1.5803-1.6664. Sterling's current weakness versus the Japanese yen shall pressure price here and downside bias is seen for weakness towards previous support at 1.6187.

Therefore, we will sell cable on recovery in anticipation of another drop for another attempt of 1.6187 support where a breach there will indicate a stronger retracement of the upmove from 1.5803 is under way and bring weakness to 1.6147/50 and then 1.6100/07 before staging a rebound.

On the upside, only a firm breach of the indicated last Friday's high of 1.6562 will encourage for re-test of 1.6622/64 resistance area, otherwise, price will stay inside the 1.5803-1.6664 range in a volatile manner for the rest of this month before an upside break takes place later in Q3 to indicate wave c upmove has resumed and bring further gain.

To re-cap the rally from 1.3500 (23 Jan 2009) is retracing intermediate decline from 1.8672 and although this move is viewed as a 4-wave type of corrective rise which is subdivided as a: 1.4986, b: 1.3655 and c is still under way

Based on ActionForex.com Technical Outlook

• BROWSE / IN TIMELINE
• « Trade Idea: EUR/JPY — Sell At 132.50, O.C. O Buy At 130.90
• » Trade Idea: USD/CAD

• BROWSE / IN Daily Forex Forecast
• « Trade Idea: EUR/JPY — Sell At 132.50, O.C. O Buy At 130.90
• » Trade Idea: USD/CAD