The markets were extremely quiet today with no economic data released, combined with the barrage of interest rate-related data beginning on Wednesday. I have been watching this EUR/GBP setup develop for some time now. I believe we have just seen the end of the first of three corrective waves that should put us well below the recent Wave A 0.6748 lows. The respective wave counts of Sterling and euro against the dollar both suggest EUR/GBP should be headed lower.

Notice the symmetry that is present in the two similar legs of wave-B. Wave b of B traveled 88 points, only seven pips greater than the 81 point wave a of A. This projected symmetry landed only 4 points from the .786 retracement 0.6842 of the entire wave A. Some of you will recognize this is a Gartley sell pattern. If not ,this is a very bearish pattner projecting lower EUR/GBP prices.



This is a close up of corrective waves A and B. You can more clearly see the symmetry between waves a and c. Currently, I am short one-quarter of my normal position size at the current levels of 0.6825 with the stop loss at 0.6846. If trendline support breaks at 0.6815-20, I will add another one-quarter to be short a half of my normal position size. Don't forget that EUR/GBP pips are almost twice as expensive as normal pips. I foresee us being in this position for much longer than normal, so be sure to remain patient.



Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.