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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.), 0.8270-96 (trend line cluster)
The Euro moved lower against the British Pound after showing a bearish Dark Cloud Cover candlestick pattern below resistance in a falling trend line cluster (now in the 0.8270-96 area). Prices are hovering near the 23.6% Fibonacci expansion at 0.8212, with a move lower from here targeting the 38.2%level at 0.8167. A break below this boundary exposes the 50% Fib at 0.8131. Alternatively, a reversal higher aims for 0.8274 anew.
As we noted earlier, a reasonable invalidation point to establish a stop-loss on a short trade is the February 24 high at 0.8286. Reconciling this and a target of 0.8167 with at least a 1:1 risk/reward ratio requires an entry price at 0.8227 or higher. That level is above near-term resistance, meaning a move there could be part of a reversal that invalidates bearish cues altogether. As such, we remain flat.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com