EUR/GBP Technical Analysis: Looking to Short on Bounce
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- EUR/GBP Technical Strategy: Pending Short at 0.7850
- Support: 0.7803, 0.7728, 0.7654
- Resistance: 0.7896, 0.7953, 0.8030
The Euro moved lower against the British Pound as expected after showing a bearish Dark Cloud Cover candlestick pattern. A daily close below the 38.2% Fibonacci expansionat 0.7803 exposes the 0.7728-51 area marked by the July 2012 low and the 50% level. Alternatively, a reversal above the 0.7873-96 zone (July 23 low, 23.6% Fib) clears the way for a test of the 14.6% expansion at 0.7953.
Entering short at current levels looks unattractive from a risk/reward perspective and we will establish an entry order to sell the pair at 0.7850. If triggered, the position will initially target 0.7803 and have a stop-loss triggered on a daily close above 0.7896.
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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.