EUR/GBP – 0.8755
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 :
Buy at 0.8660, Target: 0.8860, Stop: 0.8620
Position : –
Target : –
Stop : –
New strategy :
Buy at 0.8660, Target: 0.8860, Stop: 0.8620
Position : –
Target : –
Stop : –
As the single currency retreated after rising to 0.8836 early last week, retaining our view that further consolidation below this level would be seen and initial downside risk remains for correction to 0.8700, however, reckon support at 0.8652 would limit downside and bring another rise later, above 0.8836 would signal the pullback from 0.8866 has ended, bring retest of this level first. A break above this resistance would extend recent erratic upmove from 0.8304 low to 0.8880, then 0.8900, having said that, 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.
In view of this, we are looking to buy euro on further subsequent pullback but one should exit on such rise. Below 0.8650 would defer and risk test of 0.8620, a break below there would 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.
