EUR/GBP – 0.8851
Original strategy :
Sell at 0.8865, Target: 0.8735, Stop: 0.8905
Position : –
Target : –
Stop : –
New strategy :
Sell at 0.8890, Target: 0.8770, Stop: 0.8930
Position : –
Target : –
Stop : –
As the single currency found support at 0.8791 yesterday and euro has rebounded since, suggesting initial upside risk is for recovery to 0.8880-90, however, price should falter well below indicated resistance at 0.8939 (last week’s high) and bring another retreat later, below said support at 0.8791 would extend weakness to 0.8765-70 but break there is needed to signal the rebound from 0.8733 (last week’s low) has ended, bring retest of this level, break there would extend the fall from 0.9033 to 0.8700 first.
In view of this, we are looking to sell euro on further recovery as 0.8890-00 should limit upside. Only above 0.8939 resistance would abort and extend the rise from 0.8733 to resistance at 0.8957, however, break of 0.8976 resistance is needed to signal the fall from 0.9033 has ended instead, bring further gain to 0.9000, then retest of 0.9033 later.
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.
