Forex: EUR/GBP Technical Analysis – Five-Month Resistance Eyed
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- EUR/GBP Technical Strategy: Flat
- Support: 0.8255 (14.6% Fib exp.), 0.8167-87 (Jan 22, 31 swing lows)
- Resistance: 0.8295-0.8309 (23.6% Fib ret., minor trend line.), 0.8367 (major trend line)
The Euro is attempting to launch a reversal against the British Pound, with prices testing above resistance in the 0.8295-0.8309 area (marked by a falling trend line set from December and the 23.6% Fibonacci retracement). A daily close above this barrier exposes a longer-term trend line set from August, now at 0.8367. Alternatively, a turn below support at 0.8255, the 14.6% Fib expansion, targets recent swing lows in the 0.8167-87 area.
Risk/reward considerations argue against entering long while prices trade squarely at resistance while entering short would presume that the upside barrier will necessarily hold, a baselines assumption for the time being. We will hold off on taking a position for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
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