The currency pair has decreased a little in the Asian session and fails to reach the 0.8898 yesterday’s high. It could still come much higher on the short term because could be attracted by some important resistance levels (support turned into resistance). Technically, it is expected to drop much deeper on the short term, so the current rebound could be only temporary after the impressive sell-off.

The Cable has lost some ground also versus the greenback in the last days, not only against the Euro, the minor correction is natural on the short term.

Price could come to test and retest a confluence area before will resume the downside movement again. The perspective is bearish on the short term because it is located deep in the seller’s territory.

The Euro loses ground, even if the German PPI increased by 0.2% in the previous month and has come in better versus the 0.1% estimate, the indicator matched the 0.2% growth in the former reading period. Remains to see how the rate will react later when the UK will publish the Retail Sales, which could increase by 0.2% in August, less versus the 0.3% estimate.

The EUR/GBP increased after the false breakdown below the 100% Fibonacci level. Is expected to come higher to retest the third warning line (WL3) of the descending pitchfork and also the median line (ML) of the major ascending pitchfork.

We have an important confluence formed between the mentioned levels, you can see that I’ve drawn a minor Fibonacci retracement, the 38.2% retracement level represents an important resistance as well.

Remains to see if will reach the confluence, technically it should decrease again and to ignore the 100% level. The major downside target remains at the lower median line (LML) of the major ascending pitchfork.

Price could move in range in the upcoming months, support can be found at the 61.8% retracement level as well. Only a valid breakout through the mentioned confluence area will signal a further increase on the short term.