EUR/GBP Technical Analysis: Waiting for Short to Trigger

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Talking Points:

• EUR/GBP Technical Strategy: Pending Short at 0.7839
• Support: 0.7804, 0.7761, 0.7727
• Resistance: 0.7869, 0.7891, 0.7926

The Euro appears to be resuming its long-term down trend against the British Pound following the appearance of a bearish Three Inside Down candle pattern. Near-term support is at 0.7804, 23.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 0.7761-65 area marked by the 38.2% and the September 30 low. Alternatively, a reversal above 0.7856-69 area (Triangle floor, 38.2% Fib retracement) clears the way for a test of the 50% threshold at 0.7891.

Prices are too close to support to justify entering short from a risk/reward perspective and we have established a pending order to sell the pair at 0.7839. If triggered, the position will initially target 0.7804 with a stop-loss activated on a daily close above 0.7873.

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Daily Chart - Created Using FXCM Marketscope

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