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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.7145, 0.7102, 0.7060
- Resistance: 0.7197, 0.7230, 0.7282
The Euro moved lower against the British Pound as expected after prices produced a Bearish Engulfing candlestick pattern. Near-term support is in the 0.7130-45 area (April 22 close, 38.2% Fibonacci expansion), with a break below that on a daily closing basis exposing the 50% level at 0.7102. Alternatively, a reversal above the 23.6% Fib at 0.7197 clears the way for a test of the 14.6% expansion at 0.7230.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long side is premature. With that in mind, we will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
