EUR/GBP Technical Analysis: Candle Setup Hints at Bounce
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- EUR/GBP Technical Strategy: Flat
- Support: 0.7422, 0.7368, 0.7280
- Resistance: 0.7491, 0.7545, 0.7633
The Euro may have formed a bottom against the British Pound following the formation of a Bullish Engulfing candlestick pattern. A daily close above the 14.6% Fibonacci retracement at 0.7491 exposes the 23.6% level at 0.7545. Alternatively, a turn below the 14.6% Fib expansion at 0.7422 opens the door for a challenge of the 23.6% threshold at 0.7368.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish 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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.