EUR/GBP Technical Analysis: Treading Water Above 0.78
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- EUR/GBP Technical Strategy: Flat
- 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.
While we are tempted to re-enter short after the second half of our EURGBP short position was closed last week, we will tactically opt remain flat for now.The upcoming publication of the Bank of England Quarterly Inflation Report may mark a pivotal moment for monetary policy bets, throwing off chart-based direction cues. With that in mind, we will stand aside for now.
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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.