EUR/GBP – 0.8940
Original strategy :
Sold at 0.8950, Target: 0.8820, Stop: 0.8990
Position : – Short at 0.8950
Target : – 0.8820
Stop : – 0.8990
New strategy :
Hold short entered at 0.8950, Target: 0.8820, Stop: 0.8990
Position : – Short at 0.8950
Target : – 0.8820
Stop : – 0.8990
Although the single currency rebounded after finding support at 0.8842, outlook remains consolidative, reckon upside would be limited to 0.8970 and bring retreat later, below 0.8890-95 would suggest the rebound from 0.8842 has ended, bring another test of this level, below there would retain bearishness and extend weakness to support at 0.8812 but break there is needed to confirm the rebound from 0.8733 has ended at 0.9015, bring subsequent fall towards 0.8791 support.
In view of this, we are holding on to our short position entered at 0.8950. Only above indicated resistance at 0.9015 would risk test of previous resistance at 0.9033 but only a breach of this level would signal an upside break of recent established broad range has occurred, then subsequent rise to 0.9070-75 would follow.
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.
