EUR/GBP Technical Analysis: Euro Down Trend Resuming?

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Talking Points:

• EUR/GBP Technical Strategy: Flat
• Support: 0.7051, 0.6985, 0.6930
• Resistance: 0.7126, 0.7159, 0.7213

The Euro may be preparing to turn lower against the British Pound after prices put in a bearish Dark Cloud Cover candlestick pattern. Near-term support is at 0.7051, the 23.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 38.2% level at 0.6985. Alternatively, a move above trend line resistance at 0.7126 clears the way for a test of the 50% Fib retracement at 0.7159.

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