EUR/GBP – 0.8970
Original strategy :
Sold at 0.8890, stopped at 0.8930
Position : – Short at 0.8890
Target : –
Stop : – 0.8930
New strategy :
Stand aside
Position : –
Target : –
Stop : –
The single currency found renewed buying interest at 0.8812 late last week and has rallied above previous resistance at 0.8939, signaling low has indeed been formed at 0.8733 earlier, hence consolidation with upside bias is seen for further gain to 0.9000, however, reckon resistance at 0.9033 would hold on first testing due to near term overbought condition.
In view of this, would not chase this rise here and would be prudent to stand aside in the meantime. Below 0.8900 would suggest top is possibly formed instead, bring weakness to 0.8880 and possibly towards 0.8850-55, however, said support at 0.8812 should remain intact, bring another rebound 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.
