EUR/GBP Mid-Day Outlook

Daily Pivots: (S1) 0.8542; (P) 0.8594; (R1) 0.8638; More.

EUR/GBP retreats sharply today but after all it's still holding above 0.8581 minor support. Outlook remains unchanged. Another rise is still mildly in favor. Sustained trading above 0.8633 cluster resistance (50% retracement of 0.8866 to 0.8399 and 100% projection of 0.8399 to 0.8597 from 0.8435) will solidify the case that rise from 0.8399 is developing into an impulsive rally. In other words, 0.8399 is probably a medium term bottom. Further rally should then be seen to 161.8% projection at 0.8755 next. Break will target key resistance level of 0.8866. On the downside, however, break of 0.8581 will dampen this view and indicates that recent price actions are merely consolidation in the larger fall. In other words, another low below 0.8399 might be seen before EUR/GBP bottoms.

In the bigger picture, price actions from 0.9799 so far represent consolidation in the larger up trend. Current decline from 0.9494 is treated as the third leg of such correction and might have completed at 0.8399 already, so is the whole correction from 0.9799. Break of 0.8866 will confirm this case and target a retest of 0.9799 high next. On the downside, another fall cannot be ruled out for the moment. But downside momentum should continue to diminish and finally bring reversal after hitting 100% projection of 0.9799 to 0.8635 from 0.9494 at 0.8330 even in case of another fall.

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