EUR/GBP – 0.8927
New strategy :
Sell at 0.8975, Target: 0.8850, Stop: 0.9015
Position : –
Target : –
Stop : –
Although the single currency rose to 0.9015 yesterday, the subsequent retreat suggests consolidation below said resistance would be seen and weakness to 0.8870-75 is likely, below there would extend weakness to 0.8850, however, break of support at 0.8812 is needed to signal the rebound from 0.8733 has ended at 0.9015, bring subsequent fall towards 0.8791 support which is likely to hold from here.
In view of this, we are looking to sell euro on recovery as 0.8975-80 should limit upside and bring another decline. Above said resistance at 0.9015 would risk test of previous resistance at 0.9033 but only a breach of this level would signal an upside break of recent established broad range has occurred, then subsequent rise to 0.9070-75 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.