EUR/GBP Technical Analysis: Opting to Pass On Short Trade

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Talking Points:

• EUR/GBP Technical Strategy: Flat
• Support: 0.7580, 0.7511, 0.7468
• Resistance: 0.7649, 0.7692, 0.7727

The Euro is resumed its down trend against the British Pound as expected, slumping to the lowest level since March 2008. A daily close below the 100% Fibonacci expansion at 0.7580 exposes the 123.6% level at 0.7511. Alternatively, a turn above the 76.4% Fib at 0.7649 opens the door for a challenge of the 61.8% expansion at 0.7692.

While entering short seems compelling from a purely technical perspective, we will tactically opt to stand aside. We suspect the Euro may bounce following this week’s ECB policy announcement. With that in mind, we will remain flat for now and wait for a corrective pull-up to yield a more attractive selling opportunity.

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Daily Chart - Created Using FXCM Marketscope

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