Forex: EUR/GBP Technical Analysis – Sellers Aim Below 0.82
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- EUR/GBP Technical Strategy: Flat
- Support: 0.8167 (38.2% Fib exp.), 0.8131 (50% Fib exp.)
- Resistance:0.8212 (23.6% Fib exp.), 0.8274-99 (trend line cluster)
The Euro continues to sink against the British Pound after prices put in a bearish Dark Cloud Cover candlestick pattern below resistance in a falling trend line cluster (now in the 0.8274-99 area). Sellers now aim to challenge the 38.2%Fibonacci expansion at 0.8167, with a break below that targeting the 50% level at 0.8131. Alternatively, a move abovethe 23.6% Fib at 0.8212 exposes 0.8274 anew.
As we noted yesterday, a reasonable invalidation point for a short position is the February 24 high at 0.8286. Maintaining a risk/reward ratio of at least 1:1 would require a short entry price no lower than 0.8227 given a target of 0.8167. That is not only above the current market but also beyond near-term resistance, arguing against taking the trade for now. As such, we remain flat.
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.