Trade Idea: EUR/GBP - Target met and stand aside

EUR/GBP – 0.8594

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  :

Sold at 0.8690, met target at 0.8550

Position : – Short at 0.8690

Target :  – 0.8550

Stop : –

New strategy  :

Stand aside

Position : –

Target :  –

Stop : –

The single currency finally resumed recent decline in line with our bearish expectation, our short position entered at 0.8690 met our downside target at 0.8550 (with 140 points profit), however, euro found support at 0.8526 and has rebounded, suggesting minor consolidation above this level would be seen and upside risk has increased for another bounce to 0.8650 but still reckon resistance at 0.8707 would limit upside and bring another decline later.

As we have taken profit on our short position entered at 0.8690, would not chase this fall here and would be prudent to stand aside in the meantime. Below said support at 0.8526 would extend the erratic decline from 0.9576 top for retracement of early upmove to 0.8500 and later towards 0.8470.

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 - Target met and stand aside