EUR/GBP Technical Analysis: Profit Booked on Short Trade
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- EUR/GBP Technical Strategy: Flat
- Euro Breaks Trend Line from Mid-October, Hinting at Upswing vs. British PoundAhead
- Booking Profit on Second Half of Short Position and Waiting for New Selling Opportunity
The Euro looks like it may be readying a move higher against the British Pound after prices broke above falling trend line resistance set from mid-October. The appearance of a Bullish Engulfing candlestick pattern and positive RSI divergence reinforce the case for an upside scenario.
A daily close above the 14.6% Fibonacci retracement at 0.7107 opens the door for a challenge of the 23.6% level at 0.7148. Alternatively, a renewed downward push that takes prices below the 38.2% Fib expansion at 0.7025 clears the way for a test of the 50% threshold at 0.6972.
We entered short EUR/GBP at 0.7325 and subsequentlytook profit on half of the position. The threat of a bullish reversal now looks too significant to overlook and we tactically move to the sidelines, booking the remainder of the trade. The dominant trend remains bearish however and we will treat any on-coming bounce as corrective, waiting for an opportunity to re-enter short.
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