EUR/GBP – 0.8486
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
New strategy :
Sell at 0.8560, Target: 0.8430, Stop: 0.8600
Position : –
Target : –
Stop : –
Although the single currency rallied to 0.8669 late last week, the subsequent sharp retreat suggests top has possibly been formed there and consolidation with downside bias is seen for weakness to 0.8450, then 0.8420-30, however, break of 0.8375 is needed to signal the rebound from 0.8304 (last month’s low) has ended, bring further subsequent decline to 0.8332 support.
In view of this, we are looking to sell euro on recovery as 0.8550-60 should limit upside. Only break of 0.8605-10 would abort and suggest the retreat from 0.8669 has ended instead, risk retest of this last week’s high 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.