EUR/GBP – 0.9120
Original strategy :
Sell at 0.9225, Target: 0.9100, Stop: 0.9265
Position : –
Target :Â –
Stop : –
New strategy :
Sell at 0.9200, Target: 0.9060, Stop: 0.9240
Position : –
Target :Â –
Stop : –
Â
As the single currency has slipped again after brief bounce to 0.9203, suggesting the fall from 0.9307 is still in progress and mild downside bias remains for this move from temporary top of 0.9307 to bring retracement of recent upmove to 0.9095-00 (50% Fibonacci retracement of 0.8892-0.9307), then towards 0.9050 (61.8% Fibonacci retracement), however, near term oversold condition should prevent sharp fall below latter level and price should stay well above support at 0.9008.Â
In view of this, we are inclined to sell euro on recovery as resistance at 0.9203 should limit upside. Above 0.9235-40 would suggest low is formed instead, bring a stronger rebound to 0.9270 but only above said resistance at 0.9307 would revive bullishness and extend recent upmove to 0.9325-30 and possibly towards 0.9350, however, 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.
