EUR/GBP – 0.8627
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 down
Original strategy :
Buy at 0.8500, Target: 0.8600, Stop: 0.8460
Position : –
Target : –
Stop : –
New strategy :
Buy at 0.8550, Target: 0.8650, Stop: 0.8510
Position : –
Target : –
Stop : –
As the single currency has surged again after brief pullback, adding credence to our view that the rise from 0.8403 low is still in progress and mild upside bias remains for this move to extend further gain to resistance at 0.8646, break there would encourage for subsequent rise to 0.8680-85 but reckon upside would be limited and price should falter well below 0.8710, risk from there is seen for a retreat to take place later.
In view of this, would not chase this rise here and we are looking to buy euro on pullback as 0.8550 should limit downside. Below support at 0.8509 would abort and signal top is formed instead, risk weakness to 0.8460-65 break there would add credence to this view and further fall to 0.8435-40 would follow.
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.
