Forex: EUR/GBP Technical Analysis – Passing on Long Trade Setup
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- EUR/GBP Technical Strategy: Pending
- Support: 0.8258 (23.6% Fib ret.), 0.8219 (14.6% Fib ret.)
- Resistance: 0.8308-20 (38.2% Fib ret., trend line), 0.8370 (50% Fib ret.)
The Euro began to rebound against the British Pound as expected after showing a bullish Piercing Line candlestick formation. Near-term resistance is now in the 0.8308-20 area, marked by a falling trend line set from late October and the 38.2% Fibonacci retracement. A break above this barrier targets the 50% Fib at 0.8370. Alternatively, a turn back below the 23.6% level at 0.8258 aims for the 14.6% retracement at 0.8219.
A long trade with a target near the 0.83 figure and a stop on a close 0.8219 seems acceptable from a risk/reward perspective. We will opt not to fight the dominant down trend however and look for any further gains as an opportunity to narrow down an attractive short setup.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com