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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.7218, 0.7155, 0.7117
- Resistance: 0.7268, 0.7319, 0.7381
The Euro advanced against the British Pound as expected after prices produced a Bullish Engulfing candlestick pattern. A daily close above the 50% Fibonacci retracementat 0.7268 exposes the 61.8% level at 0.7319. Alternatively, a turn below the 38.2% Fib at 0.7218 opens the door for a challenge of the 23.6% retracement at 0.7155.
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
