Daily Pivots: (S1) 0.8456; (P) 0.8473; (R1) 0.8486; More…
EUR/GBP’s decline accelerates to as low as 0.8389 so far today. The break of 0.8402 should confirm completion of the consolidation pattern from 0.8303 at 0.8786. And, the correction from 0.9304 should have started the third leg. Intraday bias remains on the downside for 0.8303 support and below. At this point, we’d expect strong support from 0.8116/20 cluster support to complete the correction from 0.9304. But for now, break of 0.8511 resistance is needed to indicate short term bottoming. Otherwise, outlook will remain bearish in case of recovery.
In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. Such decline is likely ready to resume and should make a new low below 0.8303. At this point, we’d expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside. Rise from 0.6935 (2015 low) will resume at a later stage to 0.9799 (2008 high). However, sustained break of 0.8116 could bring deeper decline to next key support level at 0.7564 before the correction completes.
