Euro / Pound Correction Resumes
This is the count that we have working with for some time. Clearly, the dominant trend has been up since January 2007 but that does not mean that we can’t play the short side from time to time. We view the rally from .6679 as wave 3 within the 5 wave advance from .6535 (January 2007 low). A large wave 4 correction is underway now. The first two legs of that correction are complete and the third leg will bring price below .7766. Measured support is at .7656, just before a large congestion zone.
The hourly chart zooms in on price action since the wave 3 top at .8097. Corrections unfold as 3 wave structures (A-B-C). Wave A was down to .7766 and wave B ended right at the confluence of the 61.8% of .8097-.7766 / where c = a within B. The confluence of these measurements (along with psychological resistance at .80) makes the case for a bearish bias against the figure.