EUR/GBP – 0.8875
Original strategy :
Sell at 0.8900, Target: 0.8780, Stop: 0.8940
Position : –
Target : –
Stop : –
New strategy :
Sell at 0.8955, Target: 0.8800, Stop: 0.8995
Position : –
Target : –
Stop : –
The single currency has rebounded this week, suggesting further consolidation above last week’s low at 0.8774 would be seen and corrective bounce to 0.8907-10 is likely, however, reckon upside would be limited to resistance at 0.8950-55 and bring another decline later, below 0.8805-10 would bring retest of said support at 0.8774, break there would signal the reversal from 0.9307 top is still in progress and bearishness remains for this fall to extend weakness towards 0.8737-43 (61.8% Fibonacci retracement of 0.8384-0.9307 and previous support) but near term oversold condition should limit downside to 0.8719 support and reckon another previous chart support at 0.8652 would hold.
In view of this, would not chase this fall here and we are looking to sell euro on further recovery as 0.8950-55 should limit upside and bring another decline later. Above previous support at 0.8982 would abort and signal a temporary low has been formed, bring retracement of recent decline to 0.9000 but price should falter below resistance at 0.9048 and bring another selloff next week.
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.
