08 November 2016, GBP/USD
Wave Analysis
Just as in Euro, the cable gapped down into our objective short term support zone 1.23394-1.2438 but is yet to break below it. As long as this zone protects the lower side, we expect a possible rebound from this zone to long, otherwise, any clear developments below 1.2394 will culminate into a possible bearish price movements to the lower side. This downward rally is highly anticipated since another positively correlated pair, EUR/USD, is showing signs for going short and will likely go short during the course of the day. Thus, as long as Eur/usd is bearish, we expect to go short in the cable. These two pairs have a strong positive correlation of up to +76% and will have a similar price action during this intraday.
Trade Recommendations:
As long as the level 1.2394 protects the lower side, look for potential long positions with an ideal target at 1.2549. Any clear breakout below 1.2394 will call for short positions with an ideal target at 1.20811.
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