EUR/GBP extends lower within final wave E as bearish momentum builds

Gregor Horvat Wavetraders

EUR/GBP is moving nicely lower as anticipated back in June, continuing the expected decline after completing the previous corrective structure. The pair is now developing the final wave E, which can take some time to complete, as wave E is expected to unfold in a three-wave (A)(B)(C) structure.

Following the completion of the wave (B) bearish triangle pattern, EURGBP has started a strong decline within the projected wave (C) of E. The current downside structure suggests there is still room for further weakness, with the 0.8400–0.8300 area becoming an important potential target zone. This move could unfold through a lower-degree five-wave bearish impulse, completing the final stages of the larger corrective pattern.

On the 4H chart, EURGBP continues to extend lower as expected, but the current decline may now be approaching the completion of wave v of 3. If this count is correct, we should be alert for a higher-degree wave 4 correction, which could trigger a temporary recovery toward the 0.8545 resistance area before the next leg lower begins within wave 5.

As long as the broader bearish structure remains intact, any recovery should be viewed as corrective rather than a trend reversal.

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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