EUR/GBP falls sharply to as low as 0.8850 last week and the development indicates that correction from 0.9410 is still in progress. With 4 hours MACD crossed above signal line, some sideway trading might be seen initially this week. Nevertheless, upside should be limited below 0.8990 support turned resistance and bring fall resumption. As noted before, fall from 0.9153 is expected to resume whole fall from 0.9410 and target 0.8837 support and possibly further to 61.8% projection of 0.9410 to 0.8833 from 0.9153 at 0.8786. However, focus will be on reversal signal again as EUR/GBP re-enters into 0.8704/8837 support zone.

In the bigger picture, medium term correction from 0.9799 has completed with three waves down to 0.8399 already and rise from there is tentatively treated as resumption of long term up trend. Such rise should target a test on 0.9799 first after completing the correction from 0.9410, which should be contained by 0.8704 support. Break of 9799 will bring rally to next medium term target at 61.8% projection of 0.6535 to 0.9799 from 0.8399 at 1.0416.

However a break of 0.8704 support will argue that firstly, rise from 0.8399 has completed at 0.9410 already. Secondly, this will indicate that correction from 0.9799 is still in progress for another low below 0.8399 before completion.

In the long term picture, long term up trend in EUR/GBP might be resuming as correction from 0.9799 has completed at 0.8399. Decisive break of 0.9799 high will confirm this bullish view and target 261.8% projection of 0.5680 to 0.7258 from 0.6535 at 1.0666.

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