EUR/GBP – 0.8886
New strategy :
Sell at 0.8930, Target: 0.8800, Stop: 0.8970
Position : –
Target : –
Stop : –
Euro ran into heavy offers at 0.9033 late last week and has retreated sharply from there, suggesting top has been formed there and consolidation with mild downside bias is seen for weakness to support at 0.8850, break there would add credence to this view and suggest the rebound from 0.8746 low has ended, bring further fall to 0.8800-10 later.
In view of this, would not chase this fall here and would be prudent to sell euro on recovery as 0.8935-40 should limit upside. Above 0.8955-60 would bring recovery to 0.8955-60 but upside should be limited to 0.8985-90, price should falter well below said resistance at 0.9033, bring another selloff.
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.
