EUR/GBP's correction from 0.8806 extended lower last week and reached as low as 0.8484. Deeper decline could be seen initially this week. But loss of momentum should help 0.8446 support (50% retracement of 0.8085 to 0.8806 at 0.8446) contain downside and bring strong rebound. Above 0.8601 will turn bias back to the upside for 0.8806 high first. An eventual upside breakout is expected and break of 0.8806 will indicate resumption of larger rally from 0.7755.
In the bigger picture, price actions from 0.9799 are treated as a long term consolidation pattern and should have finished with three waves down to 0.7755 already. Focus is now on 0.9083 key resistance level. Break there will confirm this bullish case and should target 0.9799 high and above. Sustained of 0.8446 support is needed to be the first sign of medium term reversal. Otherwise, we'll stay bullish.
In the long term picture, no change in the bullish view that price actions from 0.9799 are merely a consolidation pattern and the up trend from 0.5680 is not finished yet. Indeed, such up trend is possibly resuming now. Break of 0.9083 key resistance should be a strong affirmation of the case and should at least send EUR/GBP for a test on parity.
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