Commentary - A larger correction (flat or triangle) may be unfolding from the 7/13 high of 168.94. In a triangle, price will top and reverse before 168.94. If the correction ends up unfolding as a flat, then price may exceed 168.94. Another possibility is that the rally from 149.25 is an impulse. If this is the case, then wave 3 of 3 should end soon and a corrective decline would probably end near 163.92 (former 4th) before a rally to a new high.
Strategy – Flat
Commentary – The rally to 1.6827 may have completed wave 3 within the 5 wave bull cycle from1.6175 (wave 3 began at 1.6333). A corrective decline in wave 4 should end in the 38.2%-23.6% retrace zone of wave 3, which is 1.6638/1.6710. A rally to a new high is then expected to complete a larger advance.
Strategy – Flat
Commentary – It remains our contentin that the “EURGBP is most likely headed for a test of the 2003 high at .7254 in the next few months. A bullish objective is at the 161.8% ext. of .6535-.6867/.6679 at .7216. The longer term bullish structure is strong as long as price is above .6893.” The 5 wave rally on the hourly from .6893-.7007 sets the stage for another rally following the completion of the correction from .7007. Support is at the 61.8% of .6893-.70007 at .6937.
Strategy – Remain bullish, against .6893, target .7200
Written by Jamie Saettele, Technical Currency Strategist for DailyFX.com