EUR/GBP – 0.8890
New strategy :
Sell at 0.8920, Target: 0.8820, Stop: 0.8960
Position : –
Target : –
Stop : –
As the single currency ran into renewed selling interest at 0.8957 and has retreated again, consolidation with downside bias is seen for weakness to support at 0.8856, break there would add credence to our view that top has been formed at 0.9033 earlier, bring further fall to 0.8820-25, then towards 0.8800 which is likely to hold from here due to near term oversold condition.
In view of this, we are looking to sell euro again on recovery as 0.8920-30 should limit upside. Above said resistance at 0.8957 would shift risk to upside for test of 0.8976 but reckon upside would be limited to 0.9000 and said resistance at 0.933 should remain intact, bring another retreat 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.
