Forex: EUR/GBP Technical Analysis – Two-Month Support Broken
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- EUR/GBP Technical Strategy: Flat
- Support: 0.8255-62 (trend line from Feb’14, 23.6% Fib exp.), 0.8300
- Resistance: 0.8222 (trend line from Aug’13), 0.8165 (38.2% Fib exp.)
The Euro declined as expected against the British Pound, with further weakness seen ahead after prices broke support at a rising trend line set from mid-February. Prices are now retesting resistance-turned-support at a falling trend line set from August 2013, with a break below that exposing the 38.2% Fibonacci expansion at 0.8165. Alternatively, a reversal above the 0.8255-62 area – marked by the February trend line and the 23.6% level – exposes the 0.83 figure.
Prices are too close to relevant support to justify a short position from a risk/reward perspective. We will continue to stand aside for now, looking for a more attractive setup to establish a short position.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com