EUR/GBP – 0.8979
Original strategy :
Sold at 0.8975, Target: 0.8855, Stop: 0.9015
Position : – Short at 0.8975
Target : – 0.8855
Stop : – 0.9015
New strategy :
Hold short entered at 0.8975, Target: 0.8855, Stop: 0.9015
Position : – Short at 0.8975
Target : – 0.8855
Stop : – 0.9015
Although the single currency has rebounded again today and marginal gain from here cannot be ruled out, if our view that top has been formed at 0.9033 last week is correct, upside would be limited and bring another decline later, below 0.8925 would suggest an intra-day top is formed, bring test of 0.8899 but break there is needed to signal the rebound from 0.8856 has ended, bring another test of indicated support at 0.8850-56. Once this level is penetrated, this would add credence to this view and signal the rise from 0.8746 low has ended, bring further fall to 0.8800-10 later.
In view of this, we are holding on to our short position entered at 0.8975. Above 0.9000 would defer and risk a stronger rebound to 0.9015-20 but still reckon price would falter well below said resistance at 0.9033, bring another selloff.
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.
