EUR/GBP – 0.8684
Recent wave: Major double three (A)-(B)-(C)-(X)-(A)-(B)-(C) is unfolding and 2nd (A) has possibly ended at 0.6936.
Trend: Near term down
Original strategy :
Buy at 0.8620, Target: 0.8750, Stop: 0.8580
Position : –
Target : –
Stop : –
New strategy :
Buy at 0.8620, Target: 0.8750, Stop: 0.8580
Position : –
Target : –
Stop : –
Although the single currency recovered from 0.8643, as long as indicated resistance at 0.8727 holds, near term downside risk remains for the erratic fall from 0.8788 to bring retracement of recent rise, hence weakness to 0.8620 cannot be ruled out, however, reckon downside would be limited to 0.8605 (50% Fibonacci retracement of 0.8422-0.8788) and bring another rise later, break of 0.8727 would bring test of 0.8760, above there would suggest the pullback from 0.8788 has ended, bring retest of this level, break there would extend the rise from 0.8403 low to 0.8800 and later 0.8825-30.
In view of this, we are looking to buy euro on subsequent pullback as 0.8615-20 should limit downside. Below 0.8605 (50% Fibonacci retracement of 0.8422-0.8788) would defer and suggest top is possibly formed, risk test of 0.8560-65 (61.8% Fibonacci retracement) but support at 0.8547 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.
