EUR/GBP Technical Analysis: Key Support Shelft Broken
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- EUR/GBP Technical Strategy: Pending short at 0.8461
- Euro breaks support shelf, drops to 2-month low vs. British Pound
- Short-term upswing may tilt risk/reward enough to enter short trade
The Euro dropped to the lowest level in two months against the British Pound, breaking a long-standing support shelf and hinting at deeper losses ahead. Sellers now look poised to challenge double bottom support that has capped progress to the downside since early September 2016.
A daily close below the 0.8334-70 area (double bottom, 50% Fib expansion) opens the door for a challenge of the 61.8% level at 0.8257. Alternatively, a reversal back above the 38.2% Fib at 0.8484 paves the way for a retest of rising trend line support-turned-resistance, now at 0.8559.
A short position triggered at 0.8462 was stopped out as prices swung upward to retest the underside of broken trend support. Sellers appear to have wrestled back control however. With that in mind, an order has been set to re-enter short at 0.8461. If triggered, the position will initially target 0.8370.
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