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EUR/GBP has followed its bearish “reversal day” with the completion of a top below 0.8626/21 to confirm the risk has indeed turned lower again, the Credit Suisse analyst team reports.

Below 0.8626/21, EUR/GBP suggest the base has been negated and that the recovery is already over

“EUR/GBP maintains the weak tone following its bearish ‘reversal day’ on Friday and support at 0.8626/21 has been removed with ease. This sees a small top complete which should confirm the recent basing effort has indeed been negated, with the decline having already extended to just shy of initial support at 0.8578. Whilst we would look for an initial hold here and eventual break should see a move back to the 0.8471/65 April low and then the ‘measured objective’ from the long -term top at 0.8430.”  

“Big picture, we suspect an eventual test of the 2019/2020 lows at 0.8281/39 will be staged.”

“Resistance is seen at 0.8629 initially, with a break above 0.8674 needed to ease the immediate downside bias for a move back to 0.8699, then 0.8722. Beyond here though is needed to see the “reversal day” negated for a move to 0.8761 next.”