EUR/GBP’s rebound from 0.8282 extended to as high as 0.8641 last week. Break of 0.8595 completes a double bottom pattern ( 0.8276, 0.8282). Initial bias remains on the upside this week for38.2% retracement of 0.9324 to 0.8276 at 0.8676. Break will target 50% retracement at 0.8800. On the downside, below 0.8521 minor support will turn intraday bias neutral first.
In the bigger picture, decline from 0.9324 should have made a bottom at 0.8276. But price actions from there is seen as a corrective move for the moment. Upside should be limited by 0.8786 support turned resistance to bring decline resumption. Break of 0.8276 will target 61.8% retracement of 0.6935 to 0.9324 at 0.7848.
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 deep 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.