EUR/GBP Technical Analysis: Short Position Now in Play
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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 declined as expected against the British Pound after prices produced a bearish Dark Cloud Cover candlestick pattern. Near-term support is at 0.7803, the 38.2% Fibonacci expansion, with break below that on a daily closing basis exposing the 0.7728-51 area marked by the July 2012 low and the 50% level. Alternatively, a turn above the 0.7873-96 zone (July 23 low, 23.6% Fib) opens the door for a challenge of the 14.6% expansion at 0.7953.
Our entry order to short EURGBP at 0.7850 has been triggered and prices are making initial progress toward the first target at 0.7803. A stop-loss will be activated on a daily close above 0.7896. We will take profit on half of the position and move the stop to breakeven (0.7850) once the first target is met.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com