EUR/GBP – 0.8701
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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, Target: 0.8610, Stop: 0.8775
Position : – Short at 0.8735
Target :Â – 0.8610
Stop : – 0.8775
New strategy :
Hold short entered at 0.8735, Target: 0.8610, Stop: 0.8775
Position : – Short at 0.8735
Target :Â – 0.8610
Stop : – 0.8775
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Although euro rose to as high as 0.8771 earlier today, as the single currency has retreated, retaining our view that consolidation below this level would be seen and mild downside bias remains for test of 0.8680-85, break there would suggest top is possibly formed, then test of indicated support at 0.8655 would follow, however, break of latter level is needed to add credence to this view, bring retracement of recent rise to 0.8600-10 later.
In view of this, we are holding on to our short position entered at 0.8735. Above 0.8771 would extend recent rise from 0.8312 low to previous resistance at 0.8788, however, reckon upside would be limited to 0.8800-10 due to weakening of upward momentum.
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.
