EUR/GBP Technical Analysis: Selloff Pauses at 2-Month Low
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- EUR/GBP Technical Strategy: Short at 0.7325
- Euro Corrects Higher After Dropping to Two-Month Low vs. British Pound
- Short Position Remains in Play to Capture Down Trend Resumption Ahead
The Euro corrected modestly higher after swiftly sinking to the lowest level in over two months against the British Pound. Prices reversed downward as expected after putting in a bearish Dark Cloud Cover candlestick pattern at resistance below the 0.75 figure.
Near-term support is now at 0.7145, the 61.8% Fibonacci retracement, with a break below that on a daily closing basis opening the door for a test of the 76.4% level at 0.7063. Alternatively, a move back above support-turned-resistance at 0.7211, the 50% Fib, sees the next upside barrier at 0.7278 marked by the 38.2% retracement.
We sold EUR/GBP at 0.7325 and have since taken profit on half of the trade. The rest of the position continues to be in play to take advantage of further weakness ahead. The stop-loss has been adjusted downward to the breakeven level.
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