EUR/GBP Daily Outlook

EUR/GBP dropped further to as low as 0.8697 today and is now pressing 0.8704 key support. As noted before, we're expecting strong support from 0.8704 to complete the whole correction from 0.9410. Intraday bias is neutral for the moment. ABove 0.8787 minor resistance will flip intraday bias back to the upside. Further break of 0.8855 support turned resistance will indicate that a short term bottom is formed and bring stronger rebound towards 0.9027 resistance. However, note that decisive break of 0.8704 will dampen our view and target 100% projection of 0.9410 to 0.8833 from 0.9153 at 0.8576 instead.

In the bigger picture, at this point, we're still favoring the case that medium term correction from 0.9799 has completed with three waves down to 0.8399 already. Rise from 0.8399 is possibly resuming the long term up trend. Hence, fall from 0.9410 is viewed as a correction only and should be contained by 0.8704 support. Break of 0.9027 resistance will suggest that correction from 0.9410 has completed and rise from 0.8399 is resuming for a test on 0.9799 high first and then 61.8% projection of 0.6535 to 0.9799 from 0.8399 at 1.0416.

However, decisive break of 0.8704 support will argue that firstly, rise from 0.8399 has completed at 0.9410 already. Secondly, this will indicate that fall from 0.9410 is likely the third leg of the correction pattern that started at 0.9799 and could extend beyond 0.8399 support before the whole correction concludes.