EUR/GBP Technical Analysis: Short Trade Triggered Sub-0.79
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- EUR/GBP Technical Strategy: Short at 0.7864
- Support: 0.7828, 0.7777, 0.7749
- Resistance: 0.7880, 0.7915, 0.7950
The Euro declined as expected against the British Pound after a pair of Spinning Top candlesticks marked ebbing upside momentum. Near-term support is at 0.7828, the 23.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 0.7777-84 area marked by the July 2012 floor and the 38.2% level. Alternatively, a reversal above the 0.7873-80 zone bracketed by the July 23 low and the 38.2% Fib retracement opens the door for a challenge of 0.7915, the intersection of triangle pattern support-turned-resistance and the 50% threshold.
The dominant down trend appears to have resumed and we will now enter short, initially targeting 0.7828. A stop-loss will be activated on a daily close above the 0.79 figure. We will take profit on half of the position and move the stop-loss to breakeven once the first objective is reached.
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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.