EUR/GBP’s strong rally last week argues that pullback from 0.8750 might have completed, after drawing support from 55 D EMA (now at 0.8672). Initial focus is now on 0.8750 resistance this week. Firm break there will resume larger rise from 0.8221 to 0.8867 fibonacci level. On the downside, through, break of 0.8654 support will now indicate near term bearish reversal.
In the bigger picture, rise from 0.8221 medium term bottom is seen as a corrective move. While further rally cannot be ruled out, upside should be limited by 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Considering bearish divergence condition in D MACD, firm break of 0.8654 support will be the first sign that this corrective bounce has completed. Sustained trading below 55 W EMA (now at 0.8556) will confirm, and bring retest of 0.8221 low.
In the long term picture, price action from 0.9499 (2020 high) is seen as part of the long term range pattern from 0.9799 (2008 high). Range trading should continue between 0.8201 and 0.9499, until there is clear signal of imminent breakout.
. Initial focus is now on 0.8750 resistance this week. Firm break there will resume larger rise from 0.8221 to 0.8867 fibonacci level. On the downside, through, break of 0.8654 support will now indicate near term bearish reversal.){kind=link}