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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.7997, 0.7950, 0.7880
- Resistance:0.8074, 0.8136, 0.8198
The Euro launched upward against the British Pound as expected after prices produced in a bullish Morning Star candlestick pattern. Resistance is now at 0.8074, the 38.2% Fibonacci retracement. A break above that on a daily closing basis exposes the 50% level at 0.8136. Alternatively, a reversal below the 23.6% Fib at 0.7997 opens the door for a test of 0.7950, the intersection of the 14.6% retracement and a rising trend line set from late July.
The ECB looks to be the most dovish of the leading central banks, putting the Euro at a disadvantage against its major counterparts. With that in mind, we will opt not to pursue a long position and wait for the bounce to produce a selling opportunity.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
