Forex: EUR/GBP Technical Analysis – Waiting to Enter Short Trade
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- EUR/GBP Technical Strategy: Flat
- Support: 0.8342 (23.6% Fib ret.), 0.8306 (38.2% Fib ret.)
- Resistance: 0.8399 (Mar 19 high), 0.8420 (38.2% Fib ret.)
The Euro may be carving a top against the British Pound after prices put in a Bearish Engulfing candlestick patternbelow the 0.84 figure. Initial support is at 0.8342, the 23.6% Fibonacci retracement, with break below that exposing the 38.2% level at 0.8306. Near-term resistance is at 0.8399, the March 19 high, followed by the 38.2% Fib expansion at 0.8420.
While the rebound over the past two sessions has aligned risk/reward parameters in favor of a short position, we will opt to stand aside. We are mindful of the near-term upside bias implications of the break above trend line resistance set from August 2013 two weeks ago and will wait for greater confirmation before expressing a bearish view.
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.