EUR/GBP dropped further to as low as 0.8875 last week but formed a temporary low there and turned sideway. Initial bias is neutral this week for consolidation first. In case of stronger recovery, upside should be limited well below 0.9051 resistance to bring another decline. As noted before, whole corrective rise from 0.8620 could have finished at 0.9097 already. Break of 0.8875 will target 61.8% retracement of 0.8620 to 0.9097 at 0.8802 and below.
In the bigger picture, EUR/GBP is staying in long term range pattern from 0.9304 (2016 high). At this point, there is no clear sign of range break out yet. And more corrective trading would continue. On the upside, in case of another rise, 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.