EUR/GBP’s pull back from 0.8994 extended lower last week. While it’s deep, the structure still suggests that it’s a correction. Thus we’re holding on to the view that pull back from 0.9097 has completed at 0.8847 already. Initial bias stays neutral this week first. On the upside, break of 0.8994 will target a test on 0.9097 high. Firm break there will resume the rise from 0.8620 towards 0.9305 high.
In the bigger picture, EUR/GBP is staying in long term range pattern from 0.9304 (2016 high). At this point, there is no clear sign of range break out yet. And more corrective trading would continue. On the upside, in case of another rise, 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.
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). Hence, after the consolidation from 0.9304 completes, we’d expect another medium term up trend through 0.9799 to 100% projection of 0.5680 to 0.9799 from 0.6935 at 1.1054.