EUR/GBP dropped sharply last week still stayed above 0.8861 support. Initial bias remains neutral this week first. On the downside, decisive break of 0.8861 will indicate that whole choppy rise from 0.8670 has completed. The pattern from 0.9499 should have then started a third leg to 0.8670 support and below. Nevertheless, rebound from the current level will retain near term bullishness, for another rise through 0.9291 at a later stage.

In the bigger picture, we’re seeing the price actions from 0.9499 as developing into a corrective pattern. That is, up trend from 0.6935 (2015 low) would resume at a later stage. This will remain the favored case as long as 0.8276 support holds. Decisive break of 0.9499 will target 0.9799 (2008 high).

In the long term picture, rise from 0.6935 (2015 low) is still in progress. It could be resuming long term up trend from 0.5680 (2000 low). Break of 0.9799 (2008 high) is expected down the road, as long as 0.8276 support holds.

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