EUR/GBP’s recover last week was limited by 0.8487 resistance and near term outlook remains bearish. That is, corrective rise from 0.8276 has completed at 0.8595, after rejection by 55 day EMA. On the downside, below 0.8386 will turn bias to the downside for retesting 0.8276 low first. Break will resume larger fall from 0.9324. On the upside, break of 0.8487 will dampen this bearish view and turn focus back to 0.8595 resistance instead.
In the bigger picture, decline from 0.9324 medium term top is still in progress. As long as 0.8786 support turned resistance holds, further fall is expected to 61.8% retracement of 0.6935 to 0.9324 at 0.7848. Nevertheless, break of 0.8786 will argue that fall from 0.9324 has completed and turn focus back to this high.
In the long term picture, fall from 0.9324 is currently seen as the third leg of the whole pattern from 0.9799 (2008 high). It’s a bit early to judge how fall the decline would extend to and whether 0.6935 would be taken out. We’ll pay attention to the structure of the fall from 0.9324 and corresponding downside momentum to made an assessment later.