A Case for a EUR/GBP implosion

afarghaly9 · Jul 4, 2011

A Case for a EUR/GBP imp-well at least a deep retracement of the 2010-2011 advance-plosion

It is evident that we have a 3 wave advance from the 2001 lows, they make good candidates for a 1-2-3 (possibly an A-B-C) the price action that followed is interesting we have one clearcut initial corrective pattern, what followed is subject to debate.

Here are the 2 counts:
COUNT A

EURGBP+-+Primary+Analysis+-+Jul-03+2255+PM+%25281+week%2529.png

COUNT B

EURGBP+-+Primary+Analysis+-+Jul-03+2235+PM+%25281+week%2529.png

Interms of count A we are terminating a running flat correction with an ending diagonal wave C which sould lead to a new low in terms of (W)

As for Count B we should expect a deep retracement of this leading diagonal atleast a 50 percent retracement of the action post the wave 4 low is a conservative target for shorts in this case. which is over 500pips from current price on a 2 for 1 currency pair

Happy Trading
Ahmed Farghaly

EDIT: Possibility of a wave W followed by a triangle wave X followed by a wave Y decline to the june 2010 lows. Possible in this case that would make the decline A/4 the subsequent leading diagonal is a 1/A still means a sharp decline for 2/B ;-)

Gromito · Jul 4, 2011

Interesting.

I'm currently short EUR/GBP with a target of around 0.8750 to get out.

Sentiment in GBP is extremely low at the moment due to the Euro crisis, weak UK data and the preception of further monetary easing (from previous expectation of rate raises).

However, in my view I think the market is wrong in that GBP isn't the EUR (although contagion risk is fairly high as I imagine UK banks hold significant PIIGS debt) and I think further monetary easing is extremely unlikely.

The EUR still has massive problems to sort out but is excessively strong at the moment in my opinion.

wackypete2 · Jul 4, 2011

eur has shown some recent strength and i'd short the gbp against almost anything.

My opinion:

BUY eurgbp if it slumps under .9000 today or tomorrow, stop @ .8900, target .9150

Peter

counter_violent · Jul 4, 2011

It's high time the Eur got the hiding it deserves...now is as good a place as any to start

Short .9034

DashRiprock · Jul 4, 2011

SHORT 0.9036 STOP 0.9115 TGT 1 0.8825 TGT2 0.8721 TGT3 0.8608

Don't phone it's just for fun.

wackypete2 · Jul 4, 2011

Looks like I'm the only one wanting to be long.
What the hell, I'm all in. I'll cover all bets

Peter

counter_violent · Jul 4, 2011

wackypete2 said:
Looks like I'm the only one wanting to be long.
What the hell, I'm all in. I'll cover all bets

Peter

Relax...there could be some upside...who knows

I just think this is a good area to work a position, so even if it does go up some, i'll happily work a short position overall.

wackypete2 · Jul 5, 2011

counter_violent said:
Relax...there could be some upside...who knows I just think this is a good area to work a position, so even if it does go up some, i'll happily work a short position overall.

Don't forget, I'm not getting a long position unless it pulls back under .9000 before it takes off. Recent swing low is .9003. The high for 2010 is .9148 So, there's my entry and target areas.

Different opinions is what makes a market!

Peter

squall321 · Jul 5, 2011

wackypete2 said:
Looks like I'm the only one wanting to be long.
What the hell, I'm all in. I'll cover all bets

Peter

i've been long since the beginning of may, this is going to touch parity, don't worry plenty of time to get on

wackypete2 · Jul 5, 2011

squall321 said:
i've been long since the beginning of may, this is going to touch parity, don't worry plenty of time to get on

Peter

squall321 · Jul 5, 2011

Gromito said:
Interesting.

I'm currently short EUR/GBP with a target of around 0.8750 to get out.

Sentiment in GBP is extremely low at the moment due to the Euro crisis, weak UK data and the preception of further monetary easing (from previous expectation of rate raises).

However, in my view I think the market is wrong in that GBP isn't the EUR (although contagion risk is fairly high as I imagine UK banks hold significant PIIGS debt) and I think further monetary easing is extremely unlikely.

The EUR still has massive problems to sort out but is excessively strong at the moment in my opinion.

why is more qe unlikely? mk already said rates weren't going up until unemployment is down....and thats even before the gov let half the public sector go

china is behind the euro now, officially admitted

so what is the bullish case for the £??

Gromito · Jul 5, 2011

counter_violent said:
Relax...there could be some upside...who knows I just think this is a good area to work a position, so even if it does go up some, i'll happily work a short position overall.

Agreed, if it shots pass 0.9100 then yeah there's probably another leg up in this trend but it's not a bad time to put a short on with a SL at around 0.9100 level.

Gromito · Jul 5, 2011

counter_violent said:
Relax...there could be some upside...who knows I just think this is a good area to work a position, so even if it does go up some, i'll happily work a short position overall.

squall321 said:
why is more qe unlikely? mk already said rates weren't going up until unemployment is down....and thats even before the gov let half the public sector go

china is behind the euro now, officially admitted

so what is the bullish case for the £??

QE is unlikely because of high inflation, and because the economy isn't performing THAT badly yet; it's pretty sluggish but still growing.

There are still also 2 members of the MPC that are voting for a rate raise - personally I don;t think rates will rise will into 2012 but the current weakness of GBP is overdone I think and is factoring in further QE.

Whether China is behind the Euro or not it is still fcked - Greece IS insolvent and Ireland, Portugal, Italy AND Spain are in dire straits and probably heading down a slow long path towards where Greece is now.

There are just so many problems with the Euro that Greece is just an opening act...

Plus the Conservatives are taking the right approach to the economy which will pay dividends in the long (5-10 years) run. It's just that the hole Labour left them in is so big that there's no easy way out.

L123 · Jul 5, 2011

@counter_violent: That's the type of emotive talk that could be dangerous - what is 'deserved' and 'should' happen is one thing, what actually happens might be another. Though it probably won't.

Gromito · Jul 5, 2011

Bam. EUR just got hit with Moody's Portugal debt downgrade. GBP getting hit too (especially against CHF) but not as hard as EUR.

YouAreNotFree · Jul 5, 2011

Down with the Euro, please, please, please, please, please:clap:

It always was doomed to failure. The end is drawing ever nearer.

counter_violent · Jul 5, 2011

Yep and this is exactly how all this crap works. Just cos Greece gets a vote through that pimps some more mullah out of the self serving other Europeans doesn't mean any problems have gone away. Along comes the market to remind them they are just attempting to kick the issue into the, getting shorter, long grass.

squall321 · Jul 5, 2011

omg a whole 4 days of gains lost, this is massive, they have to abandon it now

wackypete2 · Jul 6, 2011

squall321 said:
omg a whole 4 days of gains lost, this is massive, they have to abandon it now

LOL

People have short memories. Look at where it was back in Jan or a year ago. The euro is stronger now than it was then but it drops a few points and people claim it's doomed. Sure makes good trading though.

Peter

counter_violent · Jul 6, 2011

Are ya long yet...it's under .9000

A Case for a EUR/GBP implosion

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