Forex: EUR/GBP Technical Analysis – Trend Line Under Pressure
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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 fell against the British Pound as expected after prices completed a Bearish Engulfing candlestick pattern below the 0.84 figure. Prices are testing support at a rising trend line set from mid-February (now at 0.8264), a barrier reinforced by the 61.8% Fibonacci retracement at 0.8249. A break below the latter barrier targets the 76.4 level at 0.8214. Alternatively, a reversal above the 50% Fib at 0.8278 aims for the 38.2% retracement at 0.8306.
Risk/reward considerations argue against entering a trade with prices so close to relevant up- and downside technical barriers. We will opt to stand aside for now, waiting to see a breach of trend line support on a daily closing basis or a defined upside reversal signal.
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.