Forex: EUR/GBP Technical Analysis – Passing on Long Trade Setup
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- EUR/GBP Technical Strategy: Flat
- Support: 0.8348 (Jan 13 high), 0.8304 (trend line)
- Resistance: 0.8390 (38.2% Fib ret.), 0.8463 (50% Fib ret.)
The Euro looks poised to continue pushing higher against the British Pound after prices took out resistance at 0.8348, the January 13 high, after producing a significantbreakout earlier in the week. Buyers now aim to challenge the 38.2% Fibonacci retracement at 0.8390, with a further push above that targeting the 50% level at 0.8463. Alternatively, a turn back below 0.8348 exposes falling trend line resistance-turned-support at 0.8304.
A long position targeting 0.8390 with a stop-loss set to trigger on a daily close below 0.8348 requires an entry price no higher than 0.8369 to satisfy risk/reward parameters. While this is allowed for by current positioning, a 20-day ATR reading equivalent to the entire trading range in question suggests volatility is too high to employ our strategy within the available parameters. With that in mind, we will pass on this setup and wait for something more attractive to present itself.
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.