EUR/GBP Technical Analysis: Short Trade Remains in Play
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- EUR/GBP Technical Strategy: Short at 0.7311
- Support: 0.7116, 0.7005, 0.6887
- Resistance: 0.7222, 0.7384, 0.7444
The Euro may be carving out a bottom against the British Pound marked by the formation of a bullish Piercing Line candlestick pattern. A daily close above support-turned-resistance at 0.7222, the March 31 low, exposes the March 25 high at 0.7384. Alternatively, a reversal below the April 23 bottom at 0.7116 opens the door for a test of the 38.2% Fibonacci expansion at 0.7005.
We entered short EURGBP at 0.7311 and have since booked profit on half of the trade. Confirmation of reversal is absent for now and we will keep the rest of the position in play for now with a stop-loss at the breakeven level (0.7311).
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com