Daily Pivots: (S1) 0.8471; (P) 0.8568; (R1) 0.8620; More…

EUR/GBP failed to take out 38.2% retracement of 0.9304 to 0.8303 at 0.8685 and retreated. Intraday bias is turned neutral first. Break of 0.8488 minor support will argue that the recovery from 0.8303 is completed. And more importantly, bias will be turned back to the downside to extend the larger fall from 0.9304 through 0.8303 low. In that case, we’d look for bottoming around 0.8116.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. Deeper fall cannot be ruled out yet. But we’d expect strong support around 55 weeks EMA (now at 0.8230) to contain downside. Overall, the corrective pattern would take some time to complete before long term up trend resumes at a later stage. Break of 0.9304 will pave the way to 0.9799 (2008 high).

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