EUR/GBP Elliott Wave Analysis

EUR/GBP – 0.8739

EUR/GBP – The A-B-C wave (A) from 0.9805 top has ended at 0.8400.

The single currency fell again to 0.8603 (almost reached our indicated downside target at 0.8600) last week as suggested in our previous update and although price has recovered again from there and retracement to 0.8800 cannot be ruled out, as long as resistance at 0.8834 (previous support turned resistance) holds, another fall to said support is likely, break there would extend to 0.8575 (100% projection of a leg measuring from 0.9154) but the c leg as well as wave B from 0.9413 should hold above 0.8500.

Our preferred count is that the wave V of a 5-wave series from 0.5682 ended at 0.9805 earlier and major A-B-C correction is unfolding with A: 0.8637, B: 0.9491 and wave C is a 5-waver with 1: 0.9158, 2: 0.9418, extended wave 3 ended at 0.8576 followed by wave 4 at 0.8868. The wave 5 has ended at 0.8400, this also mark the end of larger degree wave C as well as (A).

The rise from 0.8400 is labeled as A leg of wave (B) which itself is sub-divided into a-b-c with a: 0.8699, b: 0.8454 and c leg is a 5-waver and ended at 0.9413. As indicated above the B wave is unfolding with a leg ended at 0.8834 and b leg of B is still in progress and the (c) leg of b may bring retest of 0.9154, then towards 0.9240/50.

On the upside, above said minor resistance at 0.8834 (previous support turned resistance) would suggest low has possibly been formed but only break of 0.8857 (tentatively wave i of c) would signal low has possibly been formed and risk rebound towards 0.8990/00 first.

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.
In the event the single currency stage a firm break above resistance at 0.9491 (or preferably above 0.9500), this would signal correction from 0.9805 is over and our alternate count is that only wave III has ended at 0.9805, then wave V may head towards psychological resistance at 1.0000