EUR/GBP – Wave & Price Action Update

June 5, 2018

2 min read

Dear Traders,

The EUR/GBP produced a strong bearish drop, as anticipated in the previous analysis. Today’s post will provide a short-term update for this pair.

ZigZag Approaching Completion

The EUR/GBP created a sharp drop from the Jun 1 high. Unfortunatelyteh swing stopped short of the channel support line (blue) and created a significant counter rally. This makes the next moves less easy to predict.

Scenario 1 (white lines): At least one more impulsive drop (which already started at the time of this writing) should take price into a new low and retest the lower channel support trendline. This would complete another ABC within Y and (purple) and potentially complete the entire sideways move and clearing the way clear for a bullish break that should reach at least 0.89 in a worst case scenario (i.e roughly 100% of Yellow Wave A and previous resistance).

Scenario 2 (red lines): Leaves the possibility of a further complication within the correction on the table, requiring anotehr ouple of zigzags before fully complete. However even this scenario should create only a very marginal lower low compared to the white scenario, which makes buy positions based on the white scenario already valid.

Trading Options

Ultimate invalidation for both scenarios lies at 0.8620 but a break of the lower channel line would already be a big warning sign that something else is afoot. A bullish bounce at the channel support with a good 4 hour candle close and a prior slow down of bearish momentum could be a valid buy signal therefore, targeting 0.89 and beyond.

All the best along your trading journey

Hubert