EUR/GBP Technical Analysis: Short Euro Position Unwound

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Talking Points:

• EUR/GBP Technical Strategy: Short at 0.7840
• Support: 0.7813, 0.7787, 0.7765
• Resistance: 0.7823, 0.7856, 0.7891

The Euro mounted a spirited recovery against the British Pound, yielding the largest daily advance in nearly three months. A daily close above Triangle floor support-turned-resistance at 0.7823 exposes 38.2% Fibonacci retracement at 0.7856. Alternatively, a turn below the 23.6% level at 0.7813 clears the way for a test of the 14.6% Fib at 0.7787.

Our EURGBP short trade from 0.7840 hit its first target at 0.7803 last week and we booked profits on half of the position. The remaining portion of open exposure was stopped out at breakeven today. We will move the sidelines for now, looking for a new opportunity to re-enter short.

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Daily Chart - Created Using FXCM Marketscope

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com