EUR/GBP not only maintains a base above 0.8643/65 but the close above 0.8574 on Friday has also seen a bullish “reversal week” established to reinforce the likelihood for a deeper recovery to 0.8732 initially, then 0.8851/61, as reported by the Credit Suisse analyst team.
The risk stays seen higher with resistance seen at 0.8732/38
“EUR/GBP not only maintains a base above key resistance at 0.8643/65 – the 23.6% retracement of the December/April fall, highs from the second half of March and 55-day average – but with the market closing above 0.8574 on Friday a bullish ‘reversal week”’ has also been established to further reinforce a recovery story.”
“We stay biased higher and look for a move to 0.8732 next, then the 38.2% retracement at 0.8761.”
“Big picture, we would not rule out a move back to the ‘neckline’ to the medium-term top and 50% retracement at 0.8851/61, but with this expected to prove a much tougher barrier.”
“Support moves to 0.8666 initially then 0.8646, with a break below 0.8526/21 needed to ease the immediate upside bias for a retreat back to 0.8578, but with fresh buyers expected here for now.”