EUR/GBP Technical Analysis: Euro Sinks to Monthly Low
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- EUR/GBP Technical Strategy: Flat
- Support: 0.7817, 0.7777, 0.7746
- Resistance: 0.7860, 0.7896, 0.7931
The Euro moved lower against the British Pound as expected after showing a bearish Dark Cloud Cover candlestick pattern. A daily close below the 76.4% Fibonacci expansion at 0.7817 exposes the July 2012 bottom at 0.7777. Alternatively, a reversal above the 0.7860-73 area (July 23 low, 61.8% level) clears the way for a test of the 50% Fib at 0.7896.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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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.