Euro Cross Pick 03.16.2011
As the near-term rally in the EUR/GBP slows ahead of the 38.2% Fibonacci retracement from the 2008 high to the 2010 low around 0.8720-40, the small reversal in the exchange rate should gather pace going forward as it maintains the downward trend from the end of 2008. However, as price action continues to come up against the trend line, I will sit on the sidelines until the euro-pound closes below former resistance around 0.8650. As the relative strength index turns around from a high of 69, there could be an opportunity to short the EUR/GBP going into the middle of the week as the technical developments reinforce a bearish outlook for the pair.
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