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Trade Idea: EUR/GBP – Sell at 0.8720 Print E-mail
Elliott Wave Daily | Written by Action Forex | Mar 06 13 14:50 GMT

EUR/GBP – 0.8639

Recent wave: v of wave 3 has possibly ended at 0.8067 but wave 4 should hold below 0.9050

Trend: Up

Original strategy          :

Sell at 0.8720, Target: 0.8580, Stop: 0.8765

Position: -
Target:  -

New strategy  :

Sell at 0.8720, Target: 0.8580, Stop: 0.8765

Position: -
Target:  -

Despite yesterday’s fall to 0.8589, as the single currency has rebounded after holding above indicated support at 0.8576 (last week’s low), retaining our view that further consolidation would be seen and another bounce to resistance at 0.8685 cannot be ruled out but 0.8720-25 (61.8% Fibonacci retracement of 0.8815-0.8576) should limit upside, bring another decline. A drop below said support at 0.8576 is needed to signal another leg of the correction from 0.8815 top is under way in wave iv for retracement of recent upmove to 0.8535-40 (38.2% Fibonacci retracement of 0.8086-0.8815) but renewed buying interests should emerge around 0.8515-20 (38.2% Fibonacci retracement of 0.8035-0.8815) and bring another leg of upmove later this month in wave v. Above said resistance would extend recent upmove in wave iii to previous resistance at 0.8831 but this wave v of iii should be limited to 0.8860-65 (61.8% projection of 0.8035-0.8717 measuring from 0.8442) and bring correction later.

In view of this, we are looking to sell euro on recovery for such wave iv correction but one should exit on subsequent decline and turn long towards 0.8500. Only below support at 0.8442 would defer bullishness and risk correction of recent upmove to 0.8425 (50% Fibonacci retracement of 0.8035-0.8815), however, price should stay above 0.8360-65 and bring another upmove later.

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.


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