EUR/GBP Daily Outlook

Daily Pivots: (S1) 0.9055; (P) 0.9088; (R1) 0.9113; More.

EUR/GBP failed below 0.9137 resistance and the break of 0.9076 minor support indicates that an intraday top is in place at 0.9132 and turned bias neutral. The development suggests that consolidation from 0.9137 is still in progress and another fall could now be seen to 0.8980 support and below. Nevertheless, downside is expected to be contained by 38.2% retracement of 0.8662 to 0.9137 at 0.8956 and bring rally resumption. Break of 0.9137 will target trend line resistance at 0.9213 next.

In the bigger picture, the main question is on whether the correction from 0.9799 is finished at 0.8399, or it is still unfolding as a larger consolidation pattern. Also, if the consolidation is still in progress, what pattern would it be. In any case, we'd expect long term up trend to resume for another high above 0.9799 eventually after completing the current medium term consolidation. Break of 0.9410 resistance will be an early signal that the long term up trend is resuming and will turn focus to 0.9799 high.

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