Despite edging higher to 0.8796, EUR/GBP failed to sustain above 0.8795 resistance and weakened towards the end of the week. We'd view that price actions from 0.8529 are merely a three wave consolidation pattern, that should be completed at 0.8796. Initial bias is mildly on the downside this week for 0.8687 minor support first. Break will target a retest on 0.8529 support. On the upside, however, break of 0.8796 will invalidate this view and should target a test on 0.8884 key resistance level instead.

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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