EURGBP - Correcting Lower then Much Higher

The daily chart for EURGBP shows 5 waves up from the 1/23 low at .6536. The 5 waves up compose a larger 1st wave and indicate that the longer term trend is now up. We expect a correction to test fibo support (.6690-.6727) before a much larger rally take place.

Current Price: .6787


The daily chart for EURGBP shows a clear 5 waves up from the 1/23 low at .6536. The 5 waves up compose a larger 1st wave and indicate that the longer term trend is now up. We expect a correction to test fibo support (.6690-.6727). .6690 is also the previous 4th wave extreme. A decline to this level will be the larger 2nd wave. A strong 3rd wave rally is expected following a correction to the cited levels.


The weekly chart shows the long term triangle and double bottom just above .6500. The pair should work up to test triangle resistance. Given the clear 5 wave rally from the low, we are ultimately looking for the EURGBP to take out the May 2003 high at .7257. We noticed this triangle and double bottom previously at http://www.dailyfx.com/story/charting_center/weekly_chart_analysis/EURGBP___Large_Triangle_with_1169827839628.html


This is a close up view of the 5 wave advance from .6536. As mentioned, a 3 wave correction should unfold and take price close to .6690 before another 5 wave advance occurs (which will be wave 3). Wave 3’s are often powerful. If wave 2 ends at or close to .6690, then the 161.8% extension of wave 1 would be the bullish target at .7193.