EUR/GBP – 0.9011
Original strategy :
Sell at 0.9130, Target: 0.9000, Stop: 0.9170
Position : –
Target : –
Stop : –
New strategy :
Sell at 0.9065, Target: 0.8955, Stop: 0.9105
Position : –
Target : –
Stop : –
As euro’s decline has accelerated today, adding credence to our view that top has been formed at 0.9307 and bearishness remains for the fall from there to bring retracement of recent upmove, hence downside bias remains for further weakness to 0.8950-55 (38.2% Fibonacci retracement of 0.8384-0.9307), below there would extend weakness to 0.8920-25 but reckon near term oversold condition would limit downside and 0.8890-00 would hold from here.
In view of this, would not chase this fall here and we are looking to sell euro on recovery as 0.9065-70 should limit upside Above 0.9100 would defer and bring a stronger rebound to 0.9135-40, however, still reckon upside would be limited to 0.9170 and resistance at 0.9203 should remain intact, bring another decline 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.
