EUR/GBP – 0.8902
New strategy :
Stand aside
Position : –
Target : –
Stop : –
Despite rising to 0.9023 late last week, the subsequent retreat has retained our view that further consolidation below previous resistance at 0.9033 would be seen and weakness to 0.8875-80 cannot be ruled out, however, reckon support at 0.8856 would hold from here and near term choppy trading would continue. Only a drop below this level would signal top has been formed at 0.9033 and bring further fall to 0.8820-25, then towards 0.8800.
On the upside, expect recovery to be limited to 0.8945-50 and reckon 0.8980-85 would hold from here, bring retreat later. Above 0.9000 would bring another test of resistance at 0.9033 but break there is needed to revive bullishness and extend the rebound from 0.8856 for further gain to 0.9060 and later towards 0.9090-00.
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.
