EUR/GBP dropped further to as low as 0.8411 last week. 0.8472 support was taken out firmly, without sign of bottoming. Initial bias remains on the downside this week. Sustained break of 0.8411 fibonacci level will target 161.8% projection of 0.9324 to 0.8786 from 0.9019 at 0.8149 next. On the upside, above 0.8467 minor resistance will turn intraday bias neutral first. Outlook will stay bearish as long as 0.8676 resistance holds, in case of rebound.

In the bigger picture, correction from 0.9324 medium term top is still in progress. Based on current downside momentum, sustained break of 38.2% retracement of 0.6935 to 0.9324 at 0.8411 would pave the way to 61.8% retracement at 0.7848. In any case, further decline would remain in favor as long as 0.8786 support turned resistance holds, even in case of strong rebound.

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In the long term picture, rise from 0.6935 (2015 low) could either be resuming the up trend from 0.5680 (2000 low). Or it’s just the second leg of the consolidation pattern from 0.9799 (2008 high). Eventual structure of the pull back from 0.9324 should reveal which case it should be.

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