Forex: EUR/GBP Technical Analysis –Passing on Short Trade Setup
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- EUR/GBP Technical Strategy: Flat
- Support: 0.8167 (Jan 22 low)
- Resistance: 0.8267-0.8331 (trend line cluster), 0.8390 (38.2% Fib exp.)
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 0.8267-0.8331 area). Near-term support is at 0.8167, the January 22 low. Alternatively, a reversal through the trend line cluster exposes the 38.2% Fibonacci retracement at 0.8390.
While risk/reward parameters have improved in line with what we discussed last week, we will opt against taking a short position. The emergence of positive RSI divergence warns of ebbing bearish momentum and hints a turn higher may be ahead. With that in mind, we will remain for now until such a scenario sees confirmation or is unambiguously negated.
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.