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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.7491, 0.7403, 0.7328
- Resistance: 0.7545, 0.7633, 0.7704
The Euro advanced against the British Pound as expected after prices produced a Bullish Engulfing candlestick pattern. A daily close above the 23.6% Fibonacci retracement at 0.7545 exposes the 38.2% level at 0.7633. Alternatively, a turn below the 14.6% Fib at 0.7491 opens the door for a challenge of the January 26 low at 0.7403.
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
