EUR/GBP – 0.8485
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 :
Sell at 0.8590, Target: 0.8460, Stop: 0.8630
Position : –
Target : –
Stop : –
New strategy :
Sell at 0.8590, Target: 0.8460, Stop: 0.8630
Position : –
Target : –
Stop : –
The single currency has continued trading lower after breaking previous support at 0.8485, adding credence to our view that recent decline from 0.8788 is still in progress and bearishness remains for further weakness to 0.8450, break there would extend the fall from 0.8788 for retracement of early upmove to 0.8420-25 but previous support at 0.8403 should hold from here.
In view of this, would not chase this fall here and would be prudent to sell euro on recovery as 0.8580-90 should limit upside. Above 0.8620-25 would abort and suggest low is formed instead, bring a stronger rebound to 0.8660-65 and possibly towards 0.8680 but price should falter below 0.8700.
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.
