EUR/GBP – 0.9145
Original strategy :
Sell at 0.9265, Target: 0.9115, Stop: 0.9305
Position : –
Target : –
Stop : –
New strategy :
Sell at 0.9225, Target: 0.9100, Stop: 0.9265
Position : –
Target : –
Stop : –
As the single currency has remained weak after retreating from last week’s high of 0.9307, adding credence to our view that temporary top has possibly been formed there and consolidation with mild downside bias is seen for correction of recent upmove to 0.9095-00 (50% Fibonacci retracement of 0.8892-0.9307, however, near term oversold condition should prevent sharp fall below 0.9050 (61.8% Fibonacci retracement) and price should stay well above support at 0.9008.
In view of this, we are inclined to sell euro on recovery as 0.9225-30 should limit upside. Above 0.9250 would suggest low is formed instead, bring a stronger rebound to 0.9270 but only above said resistance at 0.9307 would revive bullishness and extend recent upmove to 0.9325-30 and possibly towards 0.9350, however, loss of upward momentum should limit upside and price should falter below 0.9390-00.
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.
