EUR/GBP Technical Analysis: Euro Recovery Hinted Ahead

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Talking Points:

• EUR/GBP Technical Strategy: Flat
• Support: 0.7060, 0.7007, 0.6922
• Resistance: 0.7117, 0.7155, 0.7218

The Euro put in a Bullish Engulfing candlestick pattern, hinting a move higher against the British Pound may be ahead. A daily close above the 14.6% Fibonacci retracement at 0.7117 exposes the 23.6% level at 0.7155. Alternatively, a turn below the 61.8% Fib expansion at 0.7060 opens the door for a challenge of the 76.4% Fib at 0.7007.

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 short side is premature. We will remain flat for now, waiting for an actionable opportunity to present itself.

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Daily Chart - Created Using FXCM Marketscope

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com