EUR/GBP – 0.8804
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 0.8845, Target: 0.8745, Stop: 0.8885
Position : –
Target : –
Stop : –
Although the single currency recovered after finding support at 0.8756 and initial upside risk is for recovery to 0.8845-50, as long as indicated resistance at 0.8882 (last week’s high) holds, further consolidation would be seen and prospect of another retreat remains, below said support at 0.8756 would add credence to our view that a temporary top is possibly formed at 0.8882, bring retracement of recent upmove to 0.8730-35, however, still reckon downside would be limited to 0.8719 support.
In view of this, would be prudent to sell euro on recovery as 0.8845-50 should limit upside. Above 0.8882 would revive bullishness and extend recent upmove from 0.8304 low to 0.8900-10, having said that, as broad outlook remains consolidative, reckon current c leg of larger degree wave b should be limited to 0.8950 and price should falter well below 0.9000 psychological level.
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.