EUR/GBP edged higher to 0.7962 last week but failed to sustain above 0.7949 resistance. Also, strong resistance was seen from 55 days EMA and the cross reversed from there. Current development firstly indicates that rebound from 0.7755 is possibly finished at 0.7962 already. Secondly, the larger decline from 0.9083 might be resuming. Initial bias remains on the downside this week for 0.7755 first. Break will confirm fall resumption for 0.7693 key support level next. On the upside, above 0.7900 minor resistance will mix up the near term outlook and turn bias neutral.
In the bigger picture, price actions from 0.9799 are treated as a long term consolidation pattern with fall from 0.9083 as the third leg. Strong support is expected inside 0.7693/8186 support zone to conclude the consolidation. Hence, we'll continue to focus on reversal signal during this stage of the decline. Break of 0.8156 resistance will indicate medium term reversal. However, sustained break of 0.7693 will invalidate this view and could then bring deeper fall to 100% projection of 0.9799 to 0.8067 from 0.9083 at 0.7351 or even further to 0.6535/7258 support zone.
In the long term picture, the long term up trend now looks very vulnerable even though EUR/GBP is still holding on to 0.7693 key support and 61.8% retracement of 0.5680 to 0.9799 at 0.7740. Sustained break of 0.7693 will bring deeper fall back to 0.6535/7258 support zone.
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