Daily Pivots: (S1) 0.8800; (P) 0.8831; (R1) 0.8879; More…
EUR/GBP edged higher to 0.8879 earlier today but failed to sustain above 0.8851 resistance and retreated sharply again. Intraday bias is turned neutral first. Further rise is still expected as long as 0.8718 support holds. Break of 0.8879 and sustained trading above 0.8851 will pave the way to retest 0.9304 high. However, break of 0.8718 support will now indicate near term reversal and turn bias back to the downside for 0.8639 support and below.
In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. The leg from 0.9304 should have completed after testing 0.8332 structural support. But it’s too early to say that larger rise from 0.6935 is resuming. Rejection from 0.9304 will extend the consolidation with another falling leg. Meanwhile, firm break of 0.9304 will target 0.9799 (2008 high). In case of another decline, we’d expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside and bring rebound.
