EUR/GBP Technical Analysis – Euro May Be Due to Rebound
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- EUR/GBP Technical Strategy: Flat
- Support: 0.8230 (Apr 8 low), 0.8217 (trend line)
- Resistance: 0.8287 (23.6% Fib exp.), 0.8322 (38.2% Fib exp.)
The Euro fell against the British Poundas expected but the single currency may be about to recover after prices formed a bullish Three Inside Up candlestick pattern. Initial resistance lines up at 0.8287, the 23.6% Fibonacci expansion, with a break above that exposing the 38.2% level at 0.8322. Near-term support is at 0.8230, the April 8 low, followed by a falling trend line set from August 2013 (now at 0.8217).
Risk/reward considerations argue against entering long with prices trading in close proximity to relevant resistance. On the other hand, taking up the short side looks premature absent a defined bearish reversal signal. With that in mind, we will remain flat for now.
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.