EUR/GBP dived to as low as 0.8372 last week before forming a temporary low there and turned sideway. Initial bias remains neutral this week for some consolidations but recovery should be limited by 0.8485 support turned resistance and bring fall resumption. Whole decline from 0.9083 has just resumed and below 0.8372 will target 100% projection of 0.9083 to 0.8529 from 0.8830 at 0.8276, which is close to 0.8284 key support.

In the bigger picture, price actions from 0.9799 (2008 high) 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 close 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 0.8830 resistance, however, will invalidate this view and argue that the choppy rise from 0.8067 is still in progress for another high above 0.9083 before completion.

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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