EUR/GBP – 0.8785
Original strategy :
Sell at 0.8900, Target: 0.8755, Stop: 0.8940
Position : –
Target : –
Stop : –
New strategy :
Sell at 0.8885, Target: 0.8755, Stop: 0.8915
Position : –
Target : –
Stop : –
As the single currency has remained under pressure after recent selloff, suggesting the decline from 0.9033 top is still in progress and may extend further weakness towards previous support at 0.8746-50, however, break there is needed to confirm early decline from 0.9307 has resumed and extend fall to 0.8720, having said that, near term oversold condition should limit downside and reckon 0.8700 would hold from here.
In view of this, we are looking to sell euro again on recovery, above 0.8845-50 would bring corrective bounce to 0.8880-85 where renewed selling interest should emerge and bring another decline later. Only above 0.8957 resistance would abort and 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 decline 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.
