EUR/GBP Daily Outlook

Daily Pivots: (S1) 0.9098; (P) 0.9231; (R1) 0.9304; More

EUR/GBP rebounds strongly after fall from 0.9494 halted at 0.9156, above mentioned 0.9144 support. Intraday outlook is turned neutral for the moment. As discussed before, as long as 0.91544 support holds, rise from 0.8635 is likely still in progress. Above 0.9306 will argues that fall from 0.9494 is merely a correction this rally and has completed. In such case, intraday bias will be flipped back to the upside for 0.9518 resistance. however, break of 0.9144 will suggest that whole rise from 0.8635 has completed at 0.9494 with bearish divergence condition in 4 hours MACD and further decline could then be seen to 0.8635 low and below.

In the bigger picture, most importantly, note that rise from 0.7693 has completed with five waves up to 0.9799 (0.8195, 0.7808, 0.8660, 0.8234, 0.9799). Also, whole medium term rise from 0.6535 has probably completed the five wave sequence too (0.6867, 0.6678, 0.8186,. 0.7693. 0.9799). Subsequent price actions from 0.9799 is treated as correction to the up trends and it's uncertain how such correction/consolidation will be unfolded as.

If the whole correction has completed with three waves down to 0.8635, rise from there should develop into a five wave rally to retest 0.9799 high. This remains the preferred case as long as 0.9144 support holds. However, break of 0.9144 will indicate that rise from 0.8635 has completed. The three wave structure (0.9071, 0.8725, 0.9494) will in turn suggests that it's merely part of the consolidation that started at 0.9799 and fall from 0.9494 should then be the third leg. In such case, deeper decline should be seen to 0.8635 and below, with prospect for further fall to 0.8186/8234 (50% retracement of 0.6535 to 0.9799 at 0.8167) before completing the consolidation.

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