EUR/GBP – 0.8615
Recent wave: Major double three (A)-(B)-(C)-(X)-(A)-(B)-(C) is unfolding and 2nd (A) has possibly ended at 0.6936.
Trend: Near term down
Original strategy :
Bought at 0.8620, Target: 0.8750, Stop: 0.8580
Position : – Long at 0.8620
Target : – 0.8750
Stop : – 0.8580
New strategy :
Hold long entered at 0.8620, Target: 0.8750, Stop: 0.8580
Position : – Long at 0.8620
Target : – 0.8750
Stop : – 0.8580
Although the single currency has slipped again after yesterday’s brief bounce to 0.8700 and near term downside risk remains for marginal weakness from here, reckon downside would be limited to 0.8605 (50% Fibonacci retracement of 0.8422-0.8788) and bring another rebound later, break of said resistance at 0.8700 would bring test of 0.8727, above there would suggest low is formed, then gain to 0.8760 would follow, break there would suggest the pullback from 0.8788 has ended, bring retest of this level, a breach there would extend the rise from 0.8403 low to 0.8800 and later 0.8825-30.
In view of this, we are holding on to our long position entered at 0.8620. A firm break below 0.8605 (50% Fibonacci retracement of 0.8422-0.8788) would defer and suggest top has possibly been formed at 0.8788, risk test of 0.8560-65 (61.8% Fibonacci retracement) but support at 0.8547 should remain intact.
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.
