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Trade Idea: EUR/GBP - Stand aside Print E-mail
Elliott Wave Daily | Written by Action Forex | Jan 09 17 15:07 GMT
EUR/GBP - 0.8676

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 up

Original strategy  :

Sold at 0.8615, stopped at 0.8655

Position : - Short at 0.8615, stopped at 0.8655

Target :  -

Stop : - 0.8655

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

As euro's rebound from 0.8450 (last week's low) turned out to be much stronger than expected, dampening our bearishness and suggesting the erratic rise from 0.8304 low is still in progress for retracement of recent decline, hence upside risk remains for further gain to previous resistance at 0.8707, break there would encourage for headway to 0.8745-50 but near term overbought condition should limit upside to 0.8800.

In view of this, would not chase this rise here and would be prudent to stand aside for now. Below 0.8635-40 would bring weakness to 0.8600 but break of previous resistance at 0.8582 (minor wave i top) is needed to signal top is formed, bring subsequent weakness to 0.8550 and possibly towards 0.8510-20 which is likely to hold on first testing.

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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