EUR/GBP Technical Analysis – Cautious Recovery Mounted
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- EUR/GBP Technical Strategy: Flat
- Support: 0.8067 (channel floor), 0.8056 (100% Fib exp.)
- Resistance:0.8104 (76.4% Fib exp.), 0.8133 (61.8% Fib exp.)
The Euro is edging higher as expected against the British Pound after prices found support at the bottom of a falling channel set from late April. Initial resistance is at 0.8104, the 76.4% Fibonacci expansion, with a break above that exposing the 61.8% Fib at 0.8133 (this level is bolstered by the channel top at 0.8527). Alternatively, a break below support (now at 0.8067) clears the way for a challenge of the 100% expansion at 0.8056.
Risk/reward considerations argue against entering long with prices sitting squarely at relevant resistance. On the other hand, taking up the short side seems premature in the absence of a defined bearish reversal signal. We will remain on the sidelines for the time being.
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.