EUR/GBP – 0.8898

Original strategy  :

Sell at 0.9095, Target: 0.8955, Stop: 0.9135

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Position : –

Target :  –

Stop : –

New strategy  :

Sell at 0.8980, Target: 0.8850, Stop: 0.9020

Position : –

Target :  –

Stop : –

 
The single currency only recovered to 0.9048 and has dropped again, bearishness remains for there selloff from 0.9307 top to extend weakness to 0.8845 (50% Fibonacci retracement of 0.8384-0.9307), however, near term oversold condition should limit downside to 0.8800-10 and reckon 0.8780-85 would hold from here, risk from there has increased for another rebound later.

In view of this, would not chase this fall here and we are looking to sell euro on recovery as previous support at 0.8982 (now resistance) should limit upside and bring another decline later. Above 0.9000-10 would defer and risk rebound to said resistance at 0.9048 but only break there would signal low is formed instead, bring a stronger recovery to 0.9090-00.

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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