EUR/GBP – 0.8848
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 0.8845, stopped at 0.8885
Position : – Short at 0.8845
Target : –
Stop : – 0.8885
New strategy :
Stand aside
Position : –
Target : –
Stop : –
Although the single currency retreated after rising briefly to 0.8950 last week, as euro found support at 0.8743 and has staged a strong rebound, suggesting further choppy trading would be seen but reckon upside would be limited to 0.8900 and price should falter well below said resistance at 0.8950, bring retreat later. Only a break of 0.8950 would signal recent erratic rise has resumed and extend gain to 0.9000 first.
On the downside, whilst weakness to 0.8800-10 cannot be ruled out, break of 0.8780-85 is needed to signal the rebound from 0.8743 has ended, bring another test of this level, break there would extend the fall from 0.8950 for retracement of recent upmove to support at 0.8719 and possibly towards 0.8700. As near term outlook has turned 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.
