Trade Idea: EUR/GBP - Hold short entered at 0.8690
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Trade Idea: EUR/GBP - Hold short entered at 0.8690
EUR/GBP – 0.8645
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, Target: 0.8550, Stop: 0.8740
Position : – Short at 0.8690
Target : – 0.8550
Stop : – 0.8740
New strategy :
Hold short entered at 0.8690, Target: 0.8550, Stop: 0.8710
Position : – Short at 0.8690
Target : – 0.8550
Stop : – 0.8710
Although the single currency recovered after finding support at 0.8567 last week and consolidation above this level would be seen initially, bearishness remains for the erratic decline from 0.9576 top to bring retracement of early upmove to 0.8550, then towards 0.8520, however, oversold condition should limit downside to 0.8500, bring rebound later.
In view of this, we are holding on to our short position entered at 0.8690. Only above previous support at 0.8763 would defer and risk a stronger rebound to resistance at 0.8826 but price should falter below previous support at 0.8855-60, bring another decline 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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