EUR/GBP – 0.8766
Original strategy :
Sell at 0.8885, Target: 0.8755, Stop: 0.8915
Position : –
Target : –
Stop : –
New strategy :
Sell at 0.8850, Target: 0.8735, Stop: 0.8890
Position : –
Target : –
Stop : –
As the single currency has recovered after falling to 0.8733, suggesting minor consolidation above this level would be seen and corrective bounce to 0.8820-25 cannot be ruled out, however, reckon upside would be limited to 0.8850 and bring another decline later, below said support would add credence to our view that the decline from 0.9033 top is still in progress and extend further weakness towards 0.8700, however, oversold condition should limit downside to 0.8670-75.
In view of this, we are looking to sell euro again on recovery, above 0.8800 would bring corrective bounce to 0.8850 where renewed selling interest should emerge and bring another decline later. Only above resistance at 0.8902 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.
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.
