EUR/GBP – 0.8537
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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 down
Original strategy :
Sell at 0.8620, Target: 0.8520, Stop: 0.8660
Position : –
Target :Â –
Stop : –
New strategy :
Sell at 0.8620, Target: 0.8520, Stop: 0.8660
Position : –
Target :Â –
Stop : –
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Although the single currency has retreated after meeting resistance at 0.8580 on Friday, break of 0.8500-10 is needed to retain bearishness and signal the rebound from 0.8485 has ended at 0.8592, bring retest of 0.8485, break there would add credence to our view that top has been formed at 0.8788 and bearishness remains for this fall from there to bring retracement of early upmove, hence further weakness to 0.8470 would be seen but oversold condition should prevent sharp fall below 0.8450.
If said support at 0.8500-10 continues to hold, then further choppy trading would take place and risk of another bounce to 0.8592 cannot be ruled out but upside would be limited to 0.8620-25, bring another decline later. In view of this, we are looking to sell euro on subsequent recovery as 0.8620-25 should limit upside. Only above 0.8660-65 would defer and suggest low is possibly formed, risk rebound to 0.8680, then 0.8700 but price should falter below said resistance at 0.8735, bring further choppy trading 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.