Trade Idea: EUR/GBP - Buy at 0.8475

Elliott Wave Daily |

Written by Action Forex |

Nov 22 16 14:55 GMT

EUR/GBP – 0.8549

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 up

New strategy  :

Buy at 0.8475, Target: 0.8600, Stop: 0.8425

Position : –

Target :  –

Stop : –

Although the single currency has remained under pressure and near term downside risk remains for recent decline from 0.9576 top to extend weakness to 0.8470-75, loss of downward momentum should prevent sharp fall below 0.8450 and bring rebound later, above 0.8639 resistance would suggest low is possibly formed, bring rebound to 0.8675-80 but break of resistance at 0.8707 is needed to provide confirmation.

In view of this, would not chase this fall here and we are inclined to buy euro on next decline. Below 0.8425-30 would risk weakness to 0.8400, however, still reckon sharp fall below there would not be repeated and price should stay above 0.8370-75, bring another rebound 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.

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Pairs Covered: EUR/USD, USD/JPY, GBP/USD, USD/CHF

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Trade Idea: EUR/GBP - Buy at 0.8475