EUR/GBP – 0.8378
Recent wave: v of wave 3 has possibly ended at 0.8067 but wave 4 should hold below 0.8600
Trend: Down
Original strategy :
Sell at 0.8480, Target: 0.8350, Stop: 0.8525
New strategy :
Buy at 0.8385, Target: 0.8480, Stop: 0.8335
Despite intra-day fall to 0.8334, as the single currency has staged a strong rebound from there, suggesting a temporary low has possibly been formed and consolidation with upside bias is seen for gain to 0.8445/50 but break of resistance at 0.8515/20 is needed to signal a 5-waver from 0.8941 top has ended and then stronger rebound to 0.8550/60 would follow.
In view of this, we are looking to turn long on dips. Below said support would signal the aforesaid decline from 0.8941 is still in progress and extend weakness to 0.8300/10 before prospect of another rebound.
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. Above psychological resistance at 0.9000 would signal the (C) leg has ended and bring stronger rebound towards 0.9100.
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