Trade Idea: EUR/GBP – Buy at 0.8800

EUR/GBP – 0.8843

 
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 0.8660, Target: 0.8860, Stop: 0.8620

Position : –

Target :  –

Stop : –

New strategy  :

Buy at 0.8800, Target: 0.8900, Stop: 0.8760

Position : –

Target :  –

Stop : –

 
As the single currency has rebounded again after brief pullback, suggesting a retest of recent high at 0.8866 would be seen, however, break there is needed to confirm recent erratic upmove from 0.8304 low has resumed and extend further gain to 0.8880, then 0.8900, having said that, as broad outlook remains consolidative, reckon current c leg of larger degree wave b should be limited to 0.8950 and price should falter well below 0.9000 psychological level.

In view of this, we are looking to buy euro on pullback as 0.8800 should limit downside but one should exit on such rise. Below 0.8763 support would defer and prolong consolidation, risk weakness to 0.8730-35, however, reckon downside would be limited to 0.8719 support and bring another rebound later. 

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.