Forex: EUR/GBP Technical Analysis – Monthly Trend Line Tested
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- EUR/GBP Technical Strategy: Flat
- Support: 0.8264 (trend line), 0.8245 (50% Fib ret.)
- Resistance: 0.8281 (38.2% Fib ret.), 0.8326 (23.6% Fib exp.)
Euro declined against the British Pound as expected after prices completed a Bearish Engulfing candlestick pattern below the 0.84 figure. A break below the 38.2% Fibonacci expansion at 0.8281 has exposed a rising trend line guiding the upswing initiated in mid-February (0.8264). A break above this boundary eyes the 50% level at 0.8245. Alternatively, a move back above 0.8281 targets the 23.6% Fib at 0.8326.
Risk/reward considerations argue against entering short with prices squarely at near-term support. On the other hand, a long trade on the assumption that support will hold is premature absent a defined reversal signal. With that in mind, we will remain on the sidelines for the time being.
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.