FX.co ★ EUR/GBP Elliott Wave Count for January 25, 2012

Market Overview

Yesterday we saw this major pair pushing by 40 pips higher before this currency had found resistance at 0.8390 and started pushing by 80 pips lower to 0.8311, where EUR/GBP test 200 SMA Support but didn't have strength to continue pushing lower. Euro-pound finished New York session breaking 100 SMA at 0.8341. Today on the opening of the European session EUR/GBP has started moving higher, so we can expect continuation of an uptrend for the next few days.

Support and Resistance
(S3) 0.8269 (S2) 0.8299 (S1) 0.8318 (PP) 0.8348 (R1) 0.8378 (R2) 0.8397 (R3) 0.8427

Important News
(EUR) German Ifo Business Climate
(EUR) Italian Retail Sales m/m
(GBP) MPC Meeting Minutes
(GBP) Prelim GDP q/q
(GBP) BBA Mortgage Approvals
(GBP) Index of Services 3m/3m
(GBP) CBI Industrial Orders Expectations
(GBP) ECB President Draghi Speaks
(ALL) WEF Annual Meetings

Elliott Wave Analysis for EUR/GBP
EUR/GBP finishes B wave of the bigger c wave at 0.8311 and starts 5 waves up for final c wave. According to our wave rules and assuming that wave 3 will be 161.8 of wave 1, we can project our target points for the 3 Wave with our Fibonacci extension (0.8311-0.8351-0.8334) to 0.8401.

Trading Forecast
Based on Elliott Wave Rules we can expect the trend to go higher today. That is why we can come to a conclusion that we should open a LONG position at 0.8350 with Stop Loss at 0.8330 and Take Profit at 08401