EUR/GBP Weekly Outlook

EUR/GBP's rebound stalled ahead of mentioned 0.8633 cluster resistance (50% retracement of 0.8866 to 0.8399 and 100% projection of 0.8399 to 0.8597 from 0.8435) and retreated again. With 4 hours MACD dragged below signal line, an intraday top is in place and outlook is turned neutral for the moment. On the upside, sustained break of 0.8633 will solidify the case that such rise from 0.8399 is developing into something impulsive nature and in turn indicate that EUR/GBP has bottomed at 0.8399 already. This will bring a test of 0.8866 resistance next. On the downside, though, a break below 0.8435 will indicate that rebound from 0.8399 is merely a correction and whole fall from 0.9494 is still in progress for another low below 0.8399 before bottoming.

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 there is no confirmation that such fall has completed yet. Deeper decline to 100% projection of 0.9799 to 0.8635 from 0.9494 at 0.8330 is still possible. But downside will likely be contained there, and above 0.8186/8234 key cluster support zone (38.2% retracement of 0.5680 to 0.9799 at 0.8223) to complete the correction. On the upside, break of 0.8866 will be an important indication that correction from 0.9799 has completed and will turn outlook bullish for retesting this high.

In the long term picture, so far, price actions from 0.9799 are corrective in nature. Also, 0.8186/8234 key cluster support zone (38.2% retracement of 0.5680 to 0.9799 at 0.8223) remains intact. Hence, long term rally from 0.5680 is likely not completed yet. Though, some more medium term consolidation might still be seen before up trend resumption. However, sustained break of mentioned support zone will be an important signal that the long term rise has completed and will pave the way for deeper fall to next key support level of 0.7258 (61.8% retracement of 0.5680 to 0.9799 at 0.7253) next.

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