EUR/GBP Technical Analysis – Euro Slumps to 6-Week Low
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- EUR/GBP Technical Strategy: Flat
- Support: 0.8217-24 (Pitchfork bottom, 50% Fib exp.), 0.8204 (61.8% Fib exp.)
- Resistance: 0.8244 (38.2% Fib exp.), 0.8269 (23.6% Fib exp.)
The Euro has turned lower anew against the British Pound, sinking to the lowest level in six weeks and overturning a possible Head and Shoulders setup noted yesterday. Sellers are now testing support in the 0.8217-24 area marked by an Andrew’s Pitchfork bottom and the 50% Fibonacci expansion. A break downward initially exposes the 61.8% level at 0.8204. Alternatively, a move above resistance at 0.8244, the 38.2% Fib, aims for the 23.6% expansion at 0.8269.
Risk/reward considerations argue against entering a short position with prices sitting squarely at near-term support. On the other hand, entering long appears premature absent a defined bullish reversal signal. We will continue to monitor developments from the sidelines for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com