EUR/GBP – 0.8651
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 up
Original strategy :
Buy at 0.8575, Target: 0.8675, Stop: 0.8535
Position : –
Target : –
Stop : –
New strategy :
Buy at 0.8575, Target: 0.8675, Stop: 0.8535
Position : –
Target : –
Stop : –
Although the single currency rebounded after finding support at 0.8603 yesterday, break of this week’s high at 0.8675 is needed to confirm the erratic rise from 0.8312 low has resumed and extend gain to 0.8700, having said that, loss of upward momentum should prevent sharp move beyond resistance at 0.8735, risk from there is seen for a retreat later. If said resistance at 0.8675 continues to hold, then further consolidation would take place and risk of another retreat to 0.8600-05 cannot be ruled out but reckon downside would be limited to 0.8570-75 and bring another rise later.
In view of this, would not chase this rise here and would be prudent to buy euro again on pullback as 0.8575-85 should limit downside. Below 0.8550 would defer and suggest top is possibly formed, bring subsequent test of said support at 0.8524, once this level is penetrated, this would provide confirmation.
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.
