$GBPUSD : Is this the final leg up for CABLE?

 Cable, as GBPUSD is popularly known, taking its name from the first truly successful cable across the Atlantic, which once completed in July 1866 allowed reliable transmission of currency prices between the London and New York City Exchanges, has been an important pillar in world currency markets. Even though british empire and GBP have paled in significance in the the league table of world economies, GBP still remains the 4th biggest reserve currency of the world as per IMF data.

Since hitting new multi decade lows in Feb 2020, Cable made strong recovery along with rest of the asset classes from the lows of 1.1414 to nearly 1.3085 today. Does it mean the worst is behind us or the rally is coming to an end. 

Let us find out!

 On a longer term time frames, I am of the view that GBPUSD is in a final wave V diagonal possibly taking it to eventual parity with USD (i.e. GBPUSD = 1.0000) however that view is not tradable at this time and will need to wait for the market to develop. For now I see in the charts that the correction from the lows of 1.1414 is about to get completed in 3 waves up and we are reaching a confluence area which can trigger next down trend in GBPUSD.

I see 1.3295-1.3385 as potential short area with stops above 1.3520. As a first target I would watch 1.2660 which will also allow me to move stops to break even and take partial profits. I will also evaluate the market around that time again.

There is a possibility that the top is already set since the RSI is showing divergences, though as per my current wave count, I still see at least one more high which is preventing me from taking the short straight away. However if GBPUSD starts dropping below 1.2950, I would need to evaluate the potential short area again. 

As always please do your own analysis. If you like my work, please comment or interact with me on twitter @vs_trader.