Trade Idea: EUR/GBP - Sell at 0.8925

EUR/GBP – 0.8880

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

Original strategy  :

Sell at 0.8950, Target: 0.8850, Stop: 0.8990

Position : –

Target :  –

Stop : –

New strategy  :

Sell at 0.8925, Target: 0.8800, Stop: 0.8965

Position : –

Target :  –

Stop : –

As the single currency has remained under pressure after yesterday’s selloff, adding credence to our view that recent corrective decline from 0.9576 top is still in progress for retracement of early upmove to 0.8800-10 but support at 0.8776 should hold from here.

In view of this, we are looking to sell euro on recovery but at a lower level as 0.8925-30 should limit upside. Above 0.8960-65 would defer and risk a stronger rebound to 0.8990-95, break there would abort and signal low is formed instead, risk a stronger rebound to 0.9020 and then test of indicated resistance at 0.9049.

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.

Trade Idea: EUR/GBP - Sell at 0.8925