Forex: EUR/GBP Technical Analysis – Euro Rally Capped Sub-0.83
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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.), 0.8361 (major trend line)
The Euro continues to stall against the British Pound, struggling to clear resistance in the 0.8295-0.8309 area (falling trend line set from December, 23.6% Fibonacci retracement). Breaking higher on a daily closing basis aims for a longer-term trend line set from August (now at 0.8361). Alternatively, turning back beneath support at the 14.6% Fib expansion (0.8255) targets recent swing lows in the 0.8167-87 region.
Hefty event risk in the form of the ECB and BOE rate decisions in the hours ahead can dramatically impact positioning, arguing against taking the current chart setup at face value. Furthermore, risk/reward parameters are far from ideal, with prices tightly bracketed by near-term technical barriers. We will watch from the sidelines for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- 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.