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Forex: EUR/GBP Technical Analysis – Stalling at Trend Line Support

Forex: EUR/GBP Technical Analysis – Stalling at Trend Line Support

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Support: 0.8249 (trend line, 61.8% Fib ret.), 0.8214 (76.4% Fib ret.)
  • Resistance: 0.8278 (50% Fib ret.), 0.8306 (38.2% Fib ret.)

The declined against the British Pound as expected after prices completed a Bearish Engulfing candlestick pattern below the 0.84 figure. Prices are now testing support at 0.8249, marked by the intersection of a rising trend line set from mid-February and the 61.8% Fibonacci retracement. A break below this barrier initially exposes the 76.4% level at 0.8214. Alternatively, a reversal above resistance at 0.8278, the 50% Fib, aims for the 38.2% retracement at 0.8306.

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 flat for the time being.

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dailyclassics_eur-chf_body_Picture_11.png, Forex: EUR/GBP Technical Analysis – Stalling at Trend Line Support

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.

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