EUR/GBP’s strong break of 0.8421 resistance last weeks argues that a medium term bottom was formed at 0.8282, on bullish convergence condition in daily MACD, ahead of 0.8276 key long term support. Initial bias remains on the upside this week for 0.8598 resistance next. Decisive break there will add to the case of trend reversal and target 38.2% retracement of 0.9499 to 0.8282 at 0.8747 next. On the downside, below 0.8398 minor support will turn intraday bias neutral first.
In the bigger picture, price actions from 0.9499 (2020 high) are still see a corrective pattern that should be contained by 0.8276 long term support (2019 low). Bullish convergence condition in daily MACD and break of 55 day EMA raises the chance that it might be completed. Sustained trading above 38.2% retracement of 0.9499 to 0.8282 at 0.8747 will affirm this bullish case and target 61.8% retracement at 0.9034 and above).
In the long term picture, outlook will stay bullish as long as 0.8276 support holds. Break of 0.9499 is in favor at a later stage, to resume the up trend from 0.6935 (2015 low). However, sustained break of 0.8276 will indicate long term trend reversal, and target 61.8% retracement of 0.6935 to 0.9499 at 0.7917, and possibly below.
