Euro Cross Pick 03.17.2011
With the EUR/GBP paring the overnight advance to 0.8716, the reversal in the exchange rate may gather pace going into the end of the week, and there could be an opportunity to fade the near-term rally as it tapers off ahead of 38.2% Fibonacci retracement from the 2008 high to the 2010 low around 0.8720-40. I am still looking for a break and a close below 0.8650 to sell the pair, and we should see a near-term correction unfold in the coming days as the relative strength index continues to come off of its recent highs. If the EUR/GBP closes below 0.8650 over the remainder of the week, I will sell at market in expectations for a test of the 100-Day SMA at 0.8507, with the stop at 0.8716, the March high.
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