EUR/GBP Elliott Wave Analysis

EUR/GBP – 0.9103

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

The single currency maintained a firm undertone against the British pound and we are keeping our count that the wave B from 0.9413 has ended at 0.8603 and break of resistance at 0.9154 would encourage for headway towards 0.9300.

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. The B wave is sub-divided by a leg ended at 0.8834 and b leg of B at 0.9154 and c leg has ended at 0.8603. Hence, wave C is now unfolding with a leg of C still in progress but should falter well below resistance at 0.9413.

On the downside, whilst pullback to 0.9000 cannot be ruled out, reckon 0.8962 (61.8% Fibonacci retracement of 0.8658 to 0.9150) would contain weakness and bring another rally to aforesaid upside target later.

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.