EUR/GBP – 0.8704
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 :
Buy at 0.8660, Target: 0.8760, Stop: 0.8620
Position : –
Target : –
Stop : –
New strategy :
Buy at 0.8645, Target: 0.8760, Stop: 0.8605
Position : –
Target : –
Stop : –
As the single currency has retreated after faltering below indicated resistance at 0.8788 (last week’s high), retaining our view that further consolidation below this level would be seen and pullback to 0.8660 cannot be ruled out, however, reckon downside would be limited to 0.8645-48 (38.2% Fibonacci retracement of 0.8422-0.8788) and bring another rise later, break of said resistance at 0.8788 would extend the rise from 0.8403 low to 0.8800, however, loss of near term upward momentum should prevent sharp move beyond 0.8825-30 and price should falter well below 0.8850.
In view of this, would not chase this rise here and we are looking to buy euro on subsequent pullback as 0.8645-50 should limit downside. Below 0.8605 (50% Fibonacci retracement of 0.8422-0.8788) would defer and suggest top is possibly formed, risk test of 0.8560-65 (61.8% Fibonacci retracement) but support at 0.8547 should remain intact.
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.
