EUR/GBP’s rally from 0.8354 continued last week and breached 0.8737 resistance before closing strongly. Initial bias stays on the upside this week. Sustained trading above 0.8737 will resume the whole rise from 0.8221. Next target is 0.8867 fibonacci level. For now, outlook will stay bullish as long as 0.8645 support holds, in case of retreat.
In the bigger picture, the structure from 0.8221 medium term bottom are not impulsive enough to suggest that it’s reversing the down trend from 0.9267 (2022 high). But even if it’s a correction, further rise is expected to 61.8% retracement of 0.9267 to 0.8221 at 0.8867. This will remain the favored case as long as 55 W EMA (now at 0.8476) holds.
In the long term picture, price action from 0.9499 (2020 high) is seen as part of the long term range pattern from 0.9799 (2008 high). Range trading should continue between 0.8201 and 0.9499, until there is clear signal of imminent breakout.
