All the Banks are calling for EURGBP lower. WAVE count speaks a different language, Stay Long whilst 0.8600 in place, Count still favors a test of Parity. Notice text book Elliot Wave, a contracting triangle present in Wave 4, before the final leg up to end this cycle.

… I was about to send out a few charts in order to sell EUR/USD at 1.4330 on rallies, and buy USD/CHF on dips at 1.0270-80, when hell broke lose and Asia had one of its spastic stop runs.

For now, it appears more S/L lower in EUR/USD, as well as in AUD.. (1.4170-50 and 0.9150-20).. I fear though, that Asia might get themselves short and we might see a squeeze into Europe.

In order to play that – if you fancy going against the trend for a quick punt – I suggest you try to sell USD/JPY around 91.20-30 with a S/L through 91.55. Downside should be limited to about 90.20-40 area  -  try 90.50 therefore.

Other than that, looking far back in the EUR/GBP chart – 0.8690-0.8710 was quite a big level on the way up – and was never seen again.. This could be an ideal short term play.. Buy around 0.8690-00, with S/L sub 0.8678. Topside should be limited to about 0.8760-65 for now. We have MPC minutes later and a lot of UK figures. After the last days, only GBP positive news and numbers being released, I wouldn’t be surprised about people being long GBP and therefore this could be a nice counterplay – should todays outcome be not that great. Try small and flexible…. (see large chart at the end)

Cable broke the short term resistance at 1.6185 on the back of MPC member Sentance gave an interview to the Guardian offering a cautiously upbeat view on the UK economy and mentioning that rates could be hiked this year if signs of inflation appeared.
After having a daily close above 200 days SMAVG at 1.6135, a good topside momentum is forming with buy on dips demand merging around 1.6175-1.6225 area.
With market talking about a test / possible break of 0.8850 in EURGBP, Sterling may appreciate more and Cable seems to be vulnerable on the topside if 1.6355-1.6365 resistance is broken.
We have 55 days SMAVG at 1.6353 and topside of the short term bearish trend channel at 1.6565 but a break of these area with strong momentum suggests a rally up to 1.6595 and 1.6725 accordingly.
For those who still believes in range trading in majors, 1.6175-1.6365 is a good range to trade although a topside failure at 1.6365 puts pressure on the support at 1.6175 on the way down and points the next support to be tested at 1.6015

EURGBP failed to extend drop beyond 0.8910 to trigger the real move to the downside by the break of Head&Shoulder formation on October 29th. With market still trading in a bearish price action, a break of 0.8940 support may bring the inevitable test of 0.8902 support which is also the merging ray of the same Head&Shoulder formation accordingly. A break of this level suggests a quick drop down to 0.8845-50 support where we have  the trailing bottom of the bearish trend channel and the 200 days WMAVG.  0.8995 and 0.9135 are the topside resistances.