Elliott Wave Weekly

EUR/GBP Elliott Wave Analysis

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EUR/GBP         –  0.9217

As the single currency has finally retreated after rising to 0.9307 earlier this week, suggesting 1-2 weeks of consolidation below this level would be seen and pullback to 0.9150-60 and possibly 0.9100-10 cannot be ruled out, however, reckon 0.9060-65 support would limit downside and bring another upmove later. We are keeping our view that early retreat from 0.9576 (wave iii top) has ended earlier at 0.8304 and bullishness remains for the rise from there to extend further gain to 0.9350, however, near term overbought condition should prevent sharp move beyond 0.9380-85 (100% projection of 0.8312-0.8950 measuring from 0.8743) and reckon 0.9400-10 would hold from here, risk from there is seen for a retreat.

Our latest preferred count is that the wave V of a 5-wave series from 0.5682 ended at 0.9805 earlier and major from there has possibly ended at 0.8067 as A-B-C-X-A-B-C. We are keeping our view that the entire correction from 0.9805 has possibly ended at 0.7756 and as labeled as the attached daily chart and impulsive move from 0.9084 has ended at 0.6938 as a 5-waver which marked as the (C) wave, recent impulsive rise is labeled as (I) (II), (i) (ii) series, indicated upside target at 0.9084 had been met, the retreat from 0.9576 suggest wave iii ended there and next upside target for wave v of (III) should head towards 0.9700 but price should falter well below parity .

On the downside, whilst initial pullback to 0.9150-60, then 0.9105-10 cannot be rule out, reckon downside would be limited to 0.9060-65 and bring another rise later. A daily close below support at 0.9008 would defer and suggest a temporary top is possibly formed, risk correction to 0.8945-50, then 0.8920-25 but reckon downside would be limited to 0.8890-95 and bring another upmove later.
 
Recommendation: Buy at 0.9065 for 0.9265 with stop below 0.8965



Euro's long term uptrend started in Feb 1981 at 0.5039 and is unfolding as a (A)-(B)-(C) move with (A): 0.8433 (Feb 1993), (B): 0.5682 (May 2000) and impulsive wave (C) should have ended at 0.9805 with wave III ended at 0.7254 (May 2003), triangle wave IV at 0.6536 (23 Jan 2007) and wave V as well as wave (C) has ended at 0.9805.

We are keeping an alternate count that only wave III ended at 0.9805 and the correction from there is the wave IV and has possibly ended at 0.6936, however, it is necessary to see a daily close above resistance at 0.9576 in order to change this to be the preferred count.