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EUR/GBP Technical Analysis: Opting to Pass on Short Trade

EUR/GBP Technical Analysis: Opting to Pass on Short Trade

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • 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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EUR/GBP Technical Analysis: Opting to Pass on Short Trade

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.

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