EUR/GBP Technical Analysis: Euro Extends to 7-Week High
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- EUR/GBP Technical Strategy: Flat
- Euro Extends to Seven-Week High vs. British Pound, Pauses to Consolidate Gains
- Waiting for Upswing to Run its Course and Yield a Short Trade Entry Opportunity
The Euro paused to consolidate the advance against the British Pound after prices extended last week’s surge to hit the highest level in seven weeks. Prices launched upward as expected following the formation of a bullish Morning Star candlestick pattern near the 0.70 mark.
From here, a daily close above the 61.8% Fibonacci retracement at 0.7298 opens the door for a challenge of the 0.7372-0.7408area, bracketed by the 76.4% level and a falling trend line set from August 2013. Alternatively, a reversal back below resistance-turned-support at 0.7238, the 50% Fib, clears the way for a test of the 38.2% retracement at 0.7177.
The upswing from mid-November lows continues to look corrective in the context of a longer-term structural decline. As such, we will opt not to chase prices higher and wait for the move to yield an attractive selling opportunity once the correction runs its course. In the meantime, we remain flat.
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