EUR/GBP Technical Analysis: 2-Month Resistance at Risk

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Talking Points:

• EUR/GBP Technical Strategy: Flat
• Support: 0.7105, 0.7038, 0.6997
• Resistance: 0.7159, 0.7240, 0.7280

The Euro continued to correct higher against the British Pound, rising to the strongest level in two weeks. A daily close above the 50% Fibonacci retracement at 0.7159 exposes the 0.7213-40 area (61.8% level, trend line). Alternatively, a turn below the 38.2% Fib at 0.7105 opens the door for a challenge of the 23.6% retracement at 0.7038.

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