EUR/GBP rose further to as high as 0.8957 last week despite some hesitations. Nonetheless, it lost momentum ahead of 0.8967 cluster resistance (50% retracement of 0.9305 to 0.8620 at 0.8963) and retreated. Initial bias is neutral this week for some consolidations first. For now, as long as 0.8815 support holds, further rally is expected in the cross. Sustained break of 0.8967 cluster resistance should confirm completion of whole decline from 0.9305. EUR/GBP should then target 61.8% retracement at 0.9043 next.
In the bigger picture, EUR/GBP is staying in long term range pattern from 0.9304 (2016 high). The corrective structure of the fall from 0.9305 to 0.8620 is raising the chance that rise from 0.8312 to 0.9305 is an impulsive move. But we’re not too confident on it yet. In any case, we’d stay cautious on strong resistance from 0.9304/5 to limit upside in case of further rally. Meanwhile, if there is another medium term decline, strong support will likely be seen from 0.8303 to contain downside.
In the long term picture, we’re holding on to the view that rise from 0.6935 (2015 low) is resuming the up trend from 0.5680 (2000 low). Hence, after the consolidation from 0.9304 completes, we’d expect another medium term up trend through 0.9799 to 100% projection of 0.5680 to 0.9799 from 0.6935 at 1.1054.