EUR/GBP Technical Analysis: Opting to Pass on Short Trade
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- EUR/GBP Technical Strategy: Flat
- Support: 0.7889, 0.7834, 0.7772
- Resistance:0.8001, 0.8033, 0.8074
The Euro launched an impressive rebound against the British Pound, producing the largest one-day rally in seven months. Near-term resistance is at 0.8001, marked by a formerly broken rising trend line set from late July. A break above this barrier on a daily closing basis exposes the June 25 high at 0.8033. Alternatively, a reversal below support at 0.7889 clears the way for a challenge of the 38.2% Fibonacci expansion at 0.7834.
Last week’s break of trend line suggested the Euro down trend was resuming and we were looking to enter short, but risk/reward considerations kept us out of the trade. We removed our standing order to sell at 0.7972 earlier this week after prices hit the trade’s would-be downside target. Returning to the drawing board upside momentum has been sufficiently strong to want to see a defined reversal signal rather than selling at market. We will continue to stand aside.
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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.