Elliott Wave Daily

Trade Idea: EUR/GBP - Sell at 0.8475


EUR/GBP - 0.8391

Recent wave: Major double three (A)-(B)-(C)-(X)-(A)-(B)-(C) is unfolding and 2nd (A) has possibly ended at 0.6936.

Trend: Near term down

Original strategy  :

Sell at 0.8425, Target: 0.8315, Stop: 0.8465

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 0.8475, Target: 0.8325, Stop: 0.8515

Position : -

Target :  -

Stop : -

As the single currency has rebounded after dropping to 0.8312 earlier this week, suggesting consolidation above this level would be seen and retracement to 0.8440-50 cannot be ruled out, however, reckon 0.8475-80 would limit upside and bring another decline, below 0.8335-40 would bring retest of said support at 0.8312 but break there is needed to signal recent decline from 0.8788 is still in progress and may extend further weakness to 0.8300, then towards 0.8275-80.

In view of this, would not chase this fall here and would be prudent to sell euro on subsequent recovery as 0.8475-80 should limit upside. Only above previous resistance at 0.8512 would abort and signal a temporary low is formed instead, risk a stronger rebound to 0.8545-50 but resistance at 0.8580 should remain intact.

Our preferred count is that, after forming a major top at 0.9805 (wave V), (A)-(B)-(C) correction is unfolding with (A) leg ended at 0.8400 (A: 0.8637, B: 0.9491 and 5-waver C ended at 0.8400. Wave (B) has ended at 0.9413 and impulsive wave (C) has either ended at 0.8067 or may extend one more fall to 0.8000 before prospect of another rally. Current breach of indicated resistance at 0.9043 confirms our view that the (C) leg has ended and bring stronger rebound towards 0.9150/54, then towards 0.9240/50.

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Author: Action Forex
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