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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.7874, 0.7850, 0.7826
- Resistance: 0.7905, 0.7923, 0.7953
The Euro may be ready to turn lower against the British Pound anew having bounced as expected following the appearance of a Bearish Engulfing candle pattern. A daily close below the 38.2% Fibonacci expansion at 0.7874 exposes the 50% level at 0.7850. Alternatively, a turn above the intersection of a falling channel top and the 23.6% Fib at 0.7905 opens the door for a challenge of the 14.6% expansion at 0.7923.
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
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
