Trade Idea: EUR/GBP – Stopped profit and buy at 0.8750

EUR/GBP – 0.8850

 
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 up

Original strategy  :

Sold at 0.8735, stopped profit at 0.8725

Position : – Short at 0.8735

Target :  –

Stop : – 0.8725

New strategy  :

Buy at 0.8750, Target: 0.8880, Stop: 0.8710

Position : –

Target :  –

Stop : –

 
The single currency found renewed buying interest at 0.8652 and has rallied again, suggesting recent erratic upmove from 0.8304 low has resumed and may extend further gain to 0.8880, then 0.8900, however, as broad outlook remains consolidative, reckon current c leg of larger degree wave b should be limited to 0.8950 and price should falter well below 0.9000, bring retreat later this week.

In view of this, we are looking to turn long on dips but one should exit on such rise. Below 0.8700-10 would defer and risk test of 0.8650-55 support but break there is needed to signal top is formed instead, bring further fall to 0.8620, then 0.8600 which is likely to hold from here.

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.