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EUR/GBP Technical Analysis: Short Position Hits First Target

EUR/GBP Technical Analysis: Short Position Hits First Target

2015-10-23 03:23:00
Ilya Spivak, Sr. Currency Strategist
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Talking Points:

  • EUR/GBP Technical Strategy: Short at 0.7325
  • Euro Testing 0.72 Figure vs. British Pound After Dropping Most in Four Years
  • Partial Profit Booked on Short Position, Stop-Loss Trailed to Breakeven Level

The Euro accelerated downward having established a top against the British Pound as expected after producing a bearish Dark Cloud Cover candlestick pattern. Prices are now trying to pave the way for a breach of the 0.72 figure having put in the largest daily decline in four years.

From here, a daily close below the 50% Fibonacci retracement at 0.7211 clears the way for a test of the 61.8% level at 0.7145. Alternatively, a turn back above the 38.2% Fib at 0.7278 – now acting as resistance – opens the door for a challenge of the 23.6% retracement at 0.7360.

We entered short EUR/GBP at 0.7325. Prices have now met our initial objective and we’ve taken profit on half of the position. The remainder of the trade remains open to capture any further weakness ahead. The stop-loss has been trailed to the breakeven level.

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EUR/GBP Technical Analysis: Short Position Hits First Target

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