EUR/GBP – 0.8835
Original strategy :
Sell at 0.8975, Target: 0.8800, Stop: 0.9015
Position : –
Target :Â –
Stop : –
New strategy :
Sell at 0.8940, Target: 0.8800, Stop: 0.8980
Position : –
Target :Â –
Stop : –
Â
Although the single currency retreated after faltering below resistance at 0.8899, reckon recent decline is not ready to resume yet and further consolidation above recent low at 0.8774 would take place, hence another corrective bounce to said resistance at 0.8899 cannot be ruled out, however, upside should be limited to 0.8940-50 and bring another decline, below 0.8795-00 would bring retest of said support at 0.8774 but break there is needed to confirm recent decline from 0.9307 top has resumed and 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.Â
In view of this, would not chase this fall here and we are looking to sell euro on further recovery as 0.8940-50 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.
