EUR/GBP Technical Analysis: Buyers Clear Path Above 0.76
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- EUR/GBP Technical Strategy: Flat
- Support: 0.7491, 0.7403, 0.7328
- Resistance: 0.7545, 0.7633, 0.7704
The Euro launched a recovery against the British Pound as expected after showing a Bullish Engulfing candlestick pattern. Near-term resistance is at 0.7633, the 38.2% Fibonacci retracement, with a break above that on a daily closing basis exposing the 50% level at 0.7704. Alternatively, a reversal below the 23.6% Fib at 0.7545 clears the way for a test of the 14.6% retracement at 0.7491.
Our fundamental outlook calls for broad-based Euro weakness as the ECB introduces aggressive stimulus expansion. With that in mind, we will treat on-coming gains as an opportunity to enter short rather than a long trade setup. In the meantime, we remain flat.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com