Daily Pivots: (S1) 0.8661; (P) 0.8700; (R1) 0.8723; More

Intraday bias in EUR/GBP stays neutral as the consolidation from 0.8766 temporary top continues. Further rally is still expected with 0.8654 support intact. Break of 0.8766 will target 0.8786 resistance and then 0.8851. Decisive break of 0.8851 will pave the way to retest 0.9304 high. However, break of 0.8654 will indicate short term topping on bearish divergence condition in 4 hour MACD. In such case, intraday bias will be turned back to the downside for 55 day EMA (now at 0.8585).

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. The leg from 0.9304 should have completed after testing 0.8332 structural support. But it’s too early to say that larger rise from 0.6935 is resuming. Rejection from 0.9304 will extend the consolidation with another falling leg. Meanwhile, firm break of 0.9304 will target 0.9799 (2008 high). In case of another decline, we’d expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside and bring rebound.

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