EUR/GBP – 0.9031
Original strategy :
Sell at 0.9065, Target: 0.8955, Stop: 0.9105
Position : –
Target : –
Stop : –
New strategy :
Sell at 0.9095, Target: 0.8955, Stop: 0.9135
Position : –
Target : –
Stop : –
As the single currency has recovered after holding above this week’s low at 0.8982, suggesting minor consolidation above this level would be seen and another bounce to 0.9060-70 cannot be ruled out, however, reckon upside would be limited to 0.9095-00 and bring another decline later, below said support at 0.8982 would signal the selloff from 0.9307 top is still in progress for retracement of recent upmove to 0.8950-55 (38.2% Fibonacci retracement of 0.8384-0.9307), below there would extend weakness to 0.8920-25 but reckon near term oversold condition would limit downside and 0.8890-00 would hold.
In view of this, would not chase this fall here and we are looking to sell euro on recovery as 0.9095-00 should limit upside and bring another decline. Above previous support at 0.9119 would defer and suggest low is formed instead, bring a stronger rebound to 0.9135-40, however, still reckon upside would be limited to 0.9170 and resistance at 0.9203 should remain intact, bring another decline 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.
