EUR/GBP – 0.9188
Original strategy :
Buy at 0.9115, Target: 0.9235, Stop: 0.9175
Position : –
Target : –
Stop : –
New strategy :
Sell at 0.9265, Target: 0.9115, Stop: 0.9305
Position : –
Target : –
Stop : –
Although the single currency has rebounded after finding support at 0.9150 and consolidation above this level is seen with mild upside bias for recovery to 0.9220-25, then 0.9245-50, if our view that a temporary top formed at 0.9307 is correct, upside would be limited to 0.9270 and bring another retreat later, below 0.9148-50 (38.2% Fibonacci retracement of 0.8892-0.9307 and said support would bring retracement of recent rise to 0.9110-15 and possibly towards 0.9095-00 (50% Fibonacci retracement).
In view of this, we are inclined to turn short on recovery as 0.9265-70 should limit upside. Only above said resistance at 0.9307 would revive bullishness and extend recent upmove to 0.9325-30 and possibly towards 0.9350 but loss of upward momentum should limit upside and price should falter below 0.9390-00.
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.
