EUR/GBP – 0.8834
Original strategy :
Buy at 0.8755, Target: 0.8855, Stop: 0.8720
Position : –
Target : –
Stop : –
New strategy :
Buy at 0.8810, Target: 0.8910, Stop: 0.8770
Position : –
Target : –
Stop : –
The single currency only slipped to 0.8760 (just missed our long entry at 0.8755) before finding renewed buying interest and the anticipated rally from there add credence to our view that low has possibly been formed at 0.8690 last week, consolidation with upside bias remains for a test of resistance at 0.8868, break above there would suggest the decline from 0.9015 has ended, bring further gain to 0.8890-00 and later towards 0.8930.
In view of this, we are still looking to buy euro on dips as 0.8800-10 should limit downside and bring another rebound. Below 0.8780 would risk retest of said support at 0.8760 but only break there would abort and signal top is formed instead, bring weakness to 0.8720-25 first.
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.
