EUR/GBP – 0.8763
The single currency has remained under pressure after breaking support at 0.8856 (now resistance) and price just broke below previous support at 0.8746, signaling the fall from 0.9307 top is still in progress, hence consolidation with downside bias remains for this fall to bring retracement of early upmove to 0.8690-95 (61.8% Fibonacci retracement of 0.8312-0.9307) and possibly towards previous support at 0.8652, however, near term oversold condition would limit downside to 0.8590-00 and price should stay above previous resistance at 0.8531.
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, although recovery to 0.8820 is likely, reckon previous support at 0.8856 (now resistance) would limit upside and bring another decline later. Above 0.8885-90 would defer and suggest low is formed instead, bring a stronger rebound to 0.8945-55 but only break of resistance at 0.8975-80 would add credence to this view, bring another bounce towards resistance at 0.9033 which is likely to hold from here.
Recommendation: Stand aside for this week
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.