EUR/GBP - At its target, bottom should be seen soon

EUR/GBP at its long term target, bottom should be seen soon

With a low printed at 0.7887, we are just 4 pips above the target-area between 0.7868 - 0.7883. Whether we will see a perfect test of the target-area or not is not important to me, what's important is, that a long term bottom should be expected soon for a major rally.

The first strong indication of a bottom being in place, will be a break above minor resistance at 0.7920 and more importantly a break above resistance at 0.7980, which will confirm that a bottom is in place for a rally to at least 0.8155 on the way higher to 0.8467 and higher.

You might wonder, why I expect a long term bottom in the 0.7868 - 0.7883 area?

The first reason is, that at 0.7883 wave 2 will have corrected 88.6% of wave 1. Second waves area allowed to correct 100% of wave 1, but a bottom will often be found near the 90% corrective target. 

The second reason is, that red wave v will be 38.2% of the distance travelled from the top of red wave i to the bottom of red wave iii subtracted from the top of red wave iv at 0.7868.

The third reason is, that we can see a clear divergence between price (making new lows) and the indicators (not making new lows). This is a sign of loss of momentum and tells us, that a bottom could be seen soon.

All together indication of a possible bottom being in place soon. Only a break below the starting point of wave 1 at 0.7763 will invalidate the long term bullish count. 

Tommy
2015-02-26
Great call on nat gas

Just wanted to drop you a note to say great call on nat gas as it held 2.67

Great job.

Tommy
JT
2014-06-23
Its been a pleasure over the years I have been following you and even better as a member the education you provide in my view is invaluable you can read books as I have but to see how you evolve your ...
Hani
2014-06-06
I have been a fan of you blog for several years!
I am so impressed at your renewal.
Elliott wave analysis is so difficult to me, but so interesting and useful.

Thank you
Hani