EUR/GBP’s break of 0.8894 minor resistance suggest short term bottoming at 0.8786, on bullish convergence condition in 4 hour MACD, after touching 61.8% retracement of 0.8472 to 0.9324 at 0.8797. Initial bias is now on the upside this week for 55 day EMA (now at 0.8966). Sustained break there will pave the way to retest 0.9324 high. On the downside, however, firm break of 0.8797 will target 0.8472 low.
In the bigger picture, the failure to sustain above 0.9305 (2017 high) suggests that consolidation from there is extending. Breach of 0.8472 cannot be ruled out but downside should be contained by 38.2% retracement of 0.6935 (2015 low) to 0.9305 at 0.8400. On the upside, firm break of 0.9327 will confirm up trend resumption.
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 0.8472 support holds, further rise should be seen through 0.9305 to 0.9799 and above down the road.
