EUR/GBP – 0.8815
Original strategy :
Sold at 0.8950, met target at 0.8820
Position : – Short at 0.8950
Target : – 0.8820
Stop : –
New strategy :
Sell at 0.8885, Target: 0.8750, Stop: 0.8920
Position : –
Target : –
Stop : –
The single currency did drop after meeting renewed selling interest at 0.8982, our short position entered at 0.8950 met downside target at 0.8820 with 130 points profit, as price has remained under pressure, bearishness remains for the fall from 0.9015 to extend weakness to 0.8770-75, then towards previous support at 0.9733 which is likely to hold on first testing.
In view of this, we are looking to reinstate short on recovery as 0.8880-85 should limit upside. Above previous support at 0.8915 (now resistance) would defer and prolong choppy trading, risk rebound to 0.8935-40, however, still reckon said resistance at 0.8982 would cap upside and bring another retreat later. Only above indicated 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.