EUR/GBP’s pull back from 0.9051 extended to 0.8891 last week, but drew support from 55 day EMA and rebounded. Initial bias remains neutral this week first. Consolidation from 0.9051 could extend with another fall through 0.8891. But downside should be contained by 38.2% retracement of 0.8489 to 0.9051 at 0.8836 to bring rebound. On the upside, break of 0.9051 will indicate rise resumption for 0.9101 key resistance next.
In the bigger picture, medium term decline from 0.9305 (2017 high) is seen as a corrective move. No change in this view. Current development argues that it might have completed with three waves down to 0.8472, just ahead of 38.2% retracement of 0.6935 (2015 low) to 0.9306 at 0.8400, after hitting 55 month EMA (now at 0.8545). Decisive break of 0.9101 resistance will confirm this bullish case. And this will be the preferred case as long as 55 week EMA (now at 0.8801) holds.
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). As long as 38.2% retracement of 0.6935 to 0.9306 at 0.8400 holds, further rise should be seen through 0.9305 to 0.9799 and above down the road.
