EUR/GBP – 0.8780
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 :
Bought at 0.8800, Target: 0.8900, Stop: 0.8760
Position : – Long at 0.8800
Target : – 0.8900
Stop : – 0.8760
New strategy :
Exit long entered at 0.8800,
Position : – Long at 0.8800
Target : –
Stop : –
Despite intra-day brief rise to 0.8882, lack of follow through buying on break of previous resistance at 0.8866 and current sharp retreat suggest top is possibly formed and downside risk has increased for test of 0.8763 support, break there would add credence to this view, bring retracement of recent upmove to 0.8730-35, however, still reckon downside would be limited to 0.8719 support.
In view of this, would be prudent to exit long entered at 0.8800 and stand aside for now. Above 0.8845-50 would bring a retest of 0.8882 but break there is needed to signal recent upmove from 0.8304 low has once again resumed and extend further gain to 0.8900-10, 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 psychological level.
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.
