EUR/GBP Technical Analysis: 3-Month Trend Line Retested
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- EUR/GBP Technical Strategy: Flat
- Support: 0.7060, 0.6930, 0.6863
- Resistance: 0.7141, 0.7206, 0.7271
The Euro corrected lower after taking out a falling trend line capping gains since early May against the British Pound. A daily close above the 38.2% Fibonacci retracement at 0.7141 exposes the 50% level at 0.7206. Alternatively, a turn below the 23.6% level at 0.7060 opens the door for a challenge of the 0.6930-50 area (July 17 and August 5 lows).
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 an actionable opportunity to present itself.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.