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EUR/GBP Technical Analysis: Looking to Sell on Bounce

EUR/GBP Technical Analysis: Looking to Sell on Bounce

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Trend Line Beak Hints at Larger Euro Recovery vs. British Pound Looming Ahead
  • Aiming to Enter Short in Line with Long-Term Trend After Upward Retracement

The Euro may have carved out a near-term bottom against the British Pound as expected after breaking above falling trend resistance set from mid-October. Prices produced a bullish Morning Star candlestick coupled with positive RSI divergence, pointing the pair was set to turn higher after finding support below the 0.70 figure.

Near-term resistance is at 0.7057, the 14.6% Fibonacci retracement, with a break above that on a daily closing basis clearing the way for a challenge of the 23.6% level at 0.7103. Alternatively, a reversal below the November 18 low at 0.6982 opens the door for a test of the July 17 bottom at 0.6930.

From a long-term perspective, the overall EUR/GBP trend appears to continue favoring the downside. As such, we will treat on-coming gains as a retracement offering a selling opportunity within the larger descent. In the meantime, we will remain flat.

Losing Money Trading Forex? This Might Be Why.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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