EUR/GBP – 0.8473
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
New strategy :
Stand aside
Position : –
Target : –
Stop : –
As the single currency has rebounded again today, suggesting further consolidation above this week’s low at 0.8384 would take place and gain to 0.8509 resistance cannot be ruled out, however, as outlook remains consolidative, reckon upside would be limited to resistance at 0.8531 and bring further choppy trading. Only a break of said resistance at 0.8531 would add credence to our view that a temporary low has been formed at 0.8312 last month and extend the rebound from there for retracement of recent decline to 0.8550
On the downside, expect pullback to be limited to 0.8425-30 and 0.8400 should hold, bring another rebound later. Below said support at 0.8384 would extend weakness to support at 0.8351 but break there is needed to signal the rebound from 0.8312 low has ended at 0.8531 and bring further fall towards this support at 0.8312 which is likely to hold from here. As near term outlook is still mixed, would be prudent to stand aside for now.
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.
