EUR/GBP was supported by at 0.8529 last week and rebounded strongly to 0.8734. But there is no change in the near term bearish outlook and Friday's sharp fall and break of 0.8620 minor support suggests that such rebound is already finished. Initial bias is back on the downside for a test on 0.8529 first. Break will confirm that recent decline from 0.9083 has resumed and should target 100% projection of 0.8884 to 0.8529 from 0.8795 at 0.8440 next. ON the upside, even in case of another recovery, break of 0.8734 is needed to be the first sign of near term reversal. Otherwise, we'll stay bearish in EUR/GBP and expect and eventual downside breakout.

In the bigger picture, price actions from 0.9799 (2008) should be unfolding as a consolidation pattern in the long term up trend. The first leg is completed with three waves down to 0.8067. Second leg should also be finished at 0.9083. Fall from 0.9083 is treated as the third leg and should target 0.8067 first and possibly further to 61.8% projection of 0.9799 to 0.8067 from 0.9083 at 0.8013 (which is closes to 0.8 psychological level). Nevertheless, we'd expect strong support from 0.7693/8186 support zone to contain downside to finish off the consolidation. On the upside, break of 0.8884 resistance is needed to invalidate this view or we'll stay bearish now.

In the long term picture, long term up trend from 2000 low of 0.5680 shouldn't be over yet and the choppy fall from 2008 high of 0.9799 should be a correction only. We'd expect such correction to be contained by 0.7963/0.8186 support zone and bring up trend resumption. Rise from 0.5680 is still expected to extend beyond 0.9799 high eventually.

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