EUR/GBP Technical Analysis: Channel Break Favors Gains
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- EUR/GBP Technical Strategy: Flat
- Support: 0.7905, 0.7852, 0.7796
- Resistance: 0.7927, 0.7956, 0.7985
The Euro advanced against the British Pound as expected after prices put in a bullish Piercing Line candlestick pattern. Near-term resistance is at 0.7927, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis exposing the 50% level at 0.7956. Alternatively, a reversal below falling channel top resistance-turned-support at 0.7905 clears the way for a test of Triangle pattern support at 0.7852.
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests that taking up the short side is premature. With that in mind, we will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope
--- 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.