EUR/GBP’s rebound last week suggests short term bottoming after drawing support from 0.8620 key support level. Further rise is expected this week as long as 0.8711 minor support holds, to 38.2% retracement of 0.9101 to 0.8617 at 0.8802. Break will target 61.8% retracement at 0.8916. On the downside, break of 0.8711 will turn bias back to the downside for 0.8617/20 support instead.
In the bigger picture, EUR/GBP is seen as staying in long term range pattern started at 0.9304 (2016 high). The medium term range is set between 0.8620 and 0.9101. Downside breakout of 0.8620 will pave the way back to 0.8312 support . Break of 0.9101 will bring retest of 0.9304/5 resistance.
In the long term picture, we’re holding on to the view that rise from 0.6935 (2015 low) is resuming the up trend from 0.5680 (2000 low). As long as 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) holds, further rise should be seen through 0.9305 to 0.9799 and above down the road.
