EUR/GBP Elliott Wave Analysis

EUR/GBP         –  0.8470

EUR/GBP – The major (A)(B)(C)-(X)-(A)(B)(C) correction from 0.9805 is unfolding and 2nd (A) has possibly ended at 0.6936.

The single currency has remained under pressure after recent anticipated decline, adding credence to our view that temporary top has been formed at 0.9576 as wave iii top and consolidation with mild downside bias remains for retracement of recent upmove in wave iv to 0.8450, then 0.8420, however, loss of near term downward momentum should prevent sharp fall below 0.8370-75 and previous support at 0.8333 should remain intact. 

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 0.7756 as a 5-waver which marked either the (C) wave or the A leg of (C), a daily close above resistance at 0.8831 would suggest (C) leg has ended and headway towards 0.9084.

On the upside, whilst recovery to 0.8550-60 and possibly 0.8600 cannot be ruled out, reckon upside would be limited to 0.8650-60 and resistance at 0.8707 should attract renewed selling interest, bring another decline later. Above 0.8760-65 would defer and risk rebound to 0.8800 but only break of previous support at 0.8856 (minor wave i trough) would abort and suggest low is formed instead, risk rebound to 0.8900 and then 0.8940-50. 

Recommendation: Sell again at 0.8705 for 0.8450 with stop above 0.8805.

 

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 may extend weakness to 0.7700, however, it is necessary to see a daily close above resistance at 0.9143 would change this to be the preferred count.

EUR/GBP Elliott Wave Analysis