The technical pattern on the EURGBP suggests the EUR may out perform GBP over the coming days. While many traders are fearful of trading EUR due to the Grexit risk, EURGBP may be one vehicle to participate while stripping out USD exposure.
From a techincal perspective, the EURGBP has appeared to carve out a 5-3 bullish pattern. This is an Elliott Wave pattern where you get 5 waves up followed by a 3 wave counter trend move. This suggests the near term trend is pointed higher.
If we look to the left, the March 2015 low to the May 2015 high is clearly an equal wave pattern. Therefore, the wave count options become more focused (see the notes in the chart for the top 3 options I'm following).
Either way, there are several counts that point towards a retest of .74. At that point, the bullish potential dissipates and the risk to reward ratio is extinguished.
An aggressive trader can look for a stop loss near 7120. A conservative trader can look to the May low near 7050.
Your counts are welcome. I'm always interested in where my counts are wrong.
Yes, I was stopped out. As mentioned in the body of the idea, a conservative trader would set a stop below the 7050 swing low. They would still be in the trade. Where abouts do you have the stop set?
DavidRoberts
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I got stopped out too, too aggressive! Is it worth getting back in do you think?
tupaitrader
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great analysis...
JWagnerFXTrader
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The wave count is still valid though I had my stop on the aggressive level. Thank you for the kind words. Best of luck!
NQunlocked
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Nice analysis! My long term outlook. Betting on 1.77 as an initial target
JWagnerFXTrader
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That is an aggressive move for sure...best of luck with the trade!
DavidRoberts
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Count is looking good...BUT are you not worried by the Greek situation? I am already long EUR/AUD. :)
Your stop seemed to me too tight.