EUR/GBP Technical Analysis: Short Trade Activated Above 0.73
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- EUR/GBP Technical Strategy: Short at 0.7325
- Euro Makes Good on Bearish Chart Setup, Breaches Key Trend Line Support
- Short Trade Triggered Initially Targeting Below 0.73 Figure vs. British Pound
The Euro turned lower against the British Pound as expected afterputting in a bearish Dark Cloud Cover candlestick pattern. A break below rising trend line support set from early August hints at deeper losses and reinforces the case for a double top below the 0.75 figure.
Near-term support is now at 0.7278, the 38.2% Fibonacci retracement, with a break below that on a daily closing basis opening the door for a test of the 50% level at 0.7211. Alternatively, a move back above the 23.6% Fib at 0.7360 clears the way for a challenge of the 14.6% retracement at 0.7410.
Technical positioning and risk/reward parameters appear attractive and we will now enter short, initially targeting 0.7278. A stop-loss will be activated on a daily close above 0.7360. We will take profit on half of the position and move the stop-loss to breakeven once the first objective is reached.
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