Forex: EUR/GBP Technical Analysis – Waiting for Short Trade Setup
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- EUR/GBP Technical Strategy: Pending Short
- Support: 0.8190 (38.2% Fib exp.), 0.8141 (50% Fib exp.)
- Resistance: 0.8217 (channel bottom), 0.8251 (23.6% Fib exp.)
The British Pound is digesting its recent surge against the Euro above support at 0.8190, the 38.2% Fibonacci expansion. A break below this boundary initially exposes the 50% level at 0.8141. Alternatively a reversal above rising channel bottom support-turned-resistance (now at 0.8217) targets the 23.6% Fib at 0.8251.
Prices are trading too close to relevant support to justify a short position on risk/reward grounds. On the other hand, entering long lacks confirmation of an upside reversal. We will stand on the sidelines for now, looking for an opportune setup to sell the pair in line with the broad-based down trend.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com