EUR/GBP – 0.8918
New strategy :
Stand aside
Position : –
Target : –
Stop : –
Despite intra-day selloff to 0.8880, lack of follow through selling on break of previous support at 0.8886 and current rebound suggest further choppy trading would be seen and recovery to 0.8940-45 cannot be ruled out, however, reckon upside would be limited to 0.8970-75 and price should falter well below resistance at 0.9033, bring another retreat later.
As near term outlook is still mixed, would be prudent to stand aside for now. Below said support at 0.8880 would bring test of indicated previous support at 0.8856, break there would signal top has been formed at 0.9033 and bring further fall to 0.8820-25, then towards 0.8800.
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.
