EUR/GBP Technical Analysis: Eyeing Key Support Above 0.77
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- EUR/GBP Technical Strategy: Flat
- Support: 0.7761, 0.7727, 0.7692
- Resistance: 0.7804, 0.7871, 0.7891
The Euro is resuming its down trend against the British Pound after prices put in a bearish Three Inside Down candlestick pattern. A daily close below the 0.7761-65 area marked by the 38.2% Fibonacci expansion and the September 30 low exposes the 50% level at 0.7727. Alternatively, a turn above the 23.6% Fib at 0.7804 opens the door for a challenge of the 0.7856-71 area (Triangle floor, 38.2% Fib retracement).
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com