Daily Pivots: (S1) 0.8932; (P) 0.8960; (R1) 0.8985; More…
EUR/GBP’s breach of 0.8992 minor resistance suggests that pull back from 0.9097 has completed at 0.8937, after drawing support from near term rising channel. Intraday bias is turned back to the upside for retesting 0.9097 first. Break will extend the larger rally from 0.8620 towards 0.9305 high. Over all, outlook will remain bullish as long as 0.8895 support holds. However, sustained break of channel support, followed by break of 0.8895, will argue that whole rise from 0.8620 has completed. And consider that it’s not clearly impulsive in structure, break of 0.8895 will also suggest reversal and turn outlook bearish.
In the bigger picture, EUR/GBP is staying in long term range pattern from 0.9304 (2016 high). The corrective structure of the fall from 0.9305 to 0.8620 is raising the chance that rise from 0.8312 to 0.9305 is an impulsive move. But we’re not too confident on it yet. In any case, we’d stay cautious on strong resistance from 0.9304/5 to limit upside in case of further rally. Meanwhile, if there is another medium term decline, strong support will likely be seen from 0.8303 to contain downside.
