EUR/GBP Technical Analysis: A Major Top in Place?
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- EUR/GBP Technical Strategy: Pending short at 0.8431
- Euro may be carving out a major top against the British Pound
- Corrective bounce sought to improve risk/reward for short trade
The Euro may have put in a major top against the British Pound after suffering the largest daily drop in three months following the announcement of a snap UK election. Prices may be on the verge of completing a large Head and Shoulders topping pattern that would imply a move below the 0.75 figure ahead.
Support is now at 0.8334, a double bottom, with a break below that on a daily closing basis opening the door for a test of the July 14 swing low at 0.8251. Alternatively, a move back above support-turned-resistance at 0.8403, the February 22 low, exposes 0.8480 (trend line, March 31 low).
Prices are too close to near-term support to justify entering short from a risk/reward perspective. As such, an entry order has been set up to sell at 0.8431. If triggered, the trade will initially target a return to 0.8334 and carry a stop-loss activated on a daily close above 0.8480.
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