EUR/GBP – 0.8523
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 :
Sold at 0.8475, stopped at 0.8515
Position : – Short at 0.8475
Target : –
Stop : – 0.8515
New strategy :
Stand aside
Position : –
Target : –
Stop : –
The single currency has continued edging higher and broke above indicated previous resistance at 0.8512, dampening our bearishness and signal temporary low has been formed at 0.8312, hence near term upside risk remains for the rebound from 0.8312 to bring retracement of recent decline to 0.8545-50, however, reckon resistance at 0.8580 would hold from here.
In view of this, would not chase this rise here and would be prudent to buy euro on subsequent pullback as 0.8450-55 should limit downside. Only below previous resistance at 0.8415 would abort and signal top is formed instead, bring weakness to 0.8380-85 but break of support at 0.8351 is needed to signal the rebound from 0.8312 has ended, bring retest of this level 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.
