[B]Commentary[/B]: We wrote yesterday that “we are still looking for a bigger pullback, to channel support near 1.9885/9900.” Cable has pulled back but has not reached channel support. Still, it is likely that the pullback is complete as 3 waves are visible and impulsive upside action is visible on the very short term charts.
The correction that just played out is most likely a 4th wave in the 5 wave sequence from 1.9621. A 5th wave rally is expected to register a new high (above 2.0014) and potentially 2.0130 before a reversal. Wave 5 (from 1.9927) would equal wave 1 at 2.0086 (measured objective). Since the rally unfolding will be a 5th wave rally and the euro is embarking on a 3rd wave rally, there is considerable upside potential for the EURGBP. [B]Strategy[/B]: Move to flat (better opportunity in EURUSD).