EUR/GBP – 0.8495
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 :
Sold at 0.8475, Target: 0.8325, Stop: 0.8515
Position : – Short at 0.8475
Target : – 0.8325
Stop : – 0.8515
New strategy :
Hold short entered at 0.8475, Target: 0.8325, Stop: 0.8515
Position : – Short at 0.8475
Target : – 0.8325
Stop : – 0.8515
The single currency opened higher today and has maintained a firm undertone, dampening our bearishness but as long as resistance at 0.8512 holds, prospect of another retreat remains, below 0.8450 would bring weakness to 0.8420, then 0.8400 but break of support at 0.8350-55 is needed to signal the rebound from 0.8312 (last week’s low has ended, bring retest of this level later.
In view of this, we are holding on to our short position entered at 0.8475. Only above indicated 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.
