EUR/GBP Daily Outlook

Daily Pivots: (S1) 0.8849; (P) 0.8892; (R1) 0.8918; More.

EUR/GBP's break of 0.8833/55 support zone confirms that whole fall from 0.9410 has resumed and at this point, intraday bias remains on the downside for 61.8% projection of 0.9410 to 0.8833 from 0.9153 at 0.8786 next. Break there will target next key support level of 0.8704. On the upside, above 0.8883 minor resistance will turn intraday bias neutral and bring recovery. But risk will remain on the downside as long as 0.9027 resistance holds and another fall is still in favor.

In the bigger picture, at this point, we're still favoring the case that medium term correction from 0.9799 has completed with three waves down to 0.8399 already. Rise from 0.8399 is possibly resuming the long term up trend. Hence, fall from 0.9410 is viewed as a correction only and should be contained by 0.8704 support. Break of 0.9027 will suggest that correction from 0.9410 has completed and rise from 0.8399 is resuming for a test on 0.9799 high first and then 61.8% projection of 0.6535 to 0.9799 from 0.8399 at 1.0416.

However, break of 0.8704 support will argue that firstly, rise from 0.8399 has completed at 0.9410 already. Secondly, this will indicate that fall from 0.9410 is likely the third leg of the correction pattern that started at 0.9799 and could extend beyond 0.8399 support before the whole correction concludes.

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