EUR/GBP dropped to 0.8866 last week but recovered just ahead of 0.8864 support. Initial bias remains neutral this week for some consolidations first. Further fall is expected as long as 0.8974 resistance holds. Firm break of 0.8864 should confirm completion of the choppy rebound from 0.8670 at 0.9175. Deeper fall should be seen to 0.8670 support. On the upside, however, break of 0.8974 will dampen this bearish case and turn bias back to the upside for rebound.

In the bigger picture, at this point, we’s still seeing the fall from 0.9499 as developing into a corrective pattern. That is, up trend form 0.6935 (2015 low) would resume at a later stage. This will remain the favored case as long as 0.8276 support holds.

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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 is expected down the road, as long as 0.8276 support holds.

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