EUR/GBP – 0.8793
As the single currency has remained under pressure after breaking support at 0.8774, suggesting the decline from 0.9307 top is still in progress and mild downside bias remains for this move to bring correction of recent upmove to 0.8690-95 (61.8% Fibonacci retracement of 0.8312-0.9307), however, loss of near term downward momentum should prevent sharp fall below previous support at 0.8652 and 0.8600 should hold from here, price should stay above 0.8530-35 (previous resistance) and bring rebound later.
Our latest preferred count is that the wave V of a 5-wave series from 0.5682 ended at 0.9805 earlier and major from there has possibly ended at 0.8067 as A-B-C-X-A-B-C. We are keeping our view that the entire correction from 0.9805 has possibly ended at 0.7756 and as labeled as the attached daily chart and impulsive move from 0.9084 has ended at 0.6938 as a 5-waver which marked as the (C) wave, recent impulsive rise is labeled as (I) (II), (i) (ii) series, indicated upside target at 0.9084 had been met, the retreat from 0.9576 suggest wave iii ended there and next upside target for wave v of (III) should head towards 0.9700 but price should falter well below parity .
On the upside, whilst initial recovery to 0.8800-10 and 0.8840 cannot be ruled out, reckon upside would be limited to resistance at 0.8899 and bring another decline. A daily close above 0.8899 would risk rebound to 0.8950-60 but only break of previous support at 0.8982 would defer and suggest low is formed instead, bring retracement of the aforesaid decline from 0.9307 to resistance at 0.9048 first.
Recommendation: Sell at 0.8895 for 0.8700 with stop above 0.8995
Euro’s long term uptrend started in Feb 1981 at 0.5039 and is unfolding as a (A)-(B)-(C) move with (A): 0.8433 (Feb 1993), (B): 0.5682 (May 2000) and impulsive wave (C) should have ended at 0.9805 with wave III ended at 0.7254 (May 2003), triangle wave IV at 0.6536 (23 Jan 2007) and wave V as well as wave (C) has ended at 0.9805.
We are keeping an alternate count that only wave III ended at 0.9805 and the correction from there is the wave IV and has possibly ended at 0.6936, however, it is necessary to see a daily close above resistance at 0.9576 in order to change this to be the preferred count.