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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.7430, 0.7384, 0.7358
- Resistance: 0.7466, 0.7501, 0.7545
The Euro extended to a three-month high against the British Pound after rebounding as expected following the formation of a bullish Piercing Line candlestick pattern. Near-term resistance is at 0.7466, the 50% Fibonacci expansion, with a break above that on a daily closing basis exposing the 61.8% level at 0.7501. Alternatively, a reversal below the 38.2% Fib at 0.7430 clears the way for a test of the 0.7384-86 area (March 25 high, 23.6% expansion).
The available trading range is too narrow to justify entering a trade on the long or short side from a risk/reward perspective. With that in mind, we will remain flat for now, waiting for price action to offer a more compelling opportunity down the road.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
