Daily Pivots: (S1) 0.8272; (P) 0.8392; (R1) 0.8473; More…
EUR/GBP drops to as low as 0.8312 so far and intraday bias remains on the downside for 0.8303 low. Current fall is seen as the third leg of the corrective pattern from 0.9034. Break of 0.8303 will target 0.8116.20 key cluster support. We’d expect strong support there to completion the correction and bring rebound. 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.
