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Talking Points:
- EUR/GBP Technical Strategy: Short at 0.8778
- Euro poised to test near-term range floor vs British Pound
- Candle pattern hints longer-term double top may be forming
The Euro slipped into the lower half of its recent range against the British Pound, hinting a test of the lower boundary may be in the cards ahead. Furthermore, the appearance of a bearish Dark Cloud Cover candlestick pattern hints a larger double top chart setup may be brewing.
From here, a daily close below the June 16 low at 0.8720 opens the door for a test of the 38.2% Fibonacci retracement at 0.8665. Alternatively, a move back above range midline and March 13 high at 0.8787 opens the door for a test of the major upside barrier at 0.8852.
An intraday bounce yesterday offered satisfactory risk/reward conditions and a short trade has been triggered at 0.8778, initially targeting 0.8720. A stop-loss will be activated on a daily close above 0.8787. Profit on half of the trade will be taken and the stop-loss moved to breakeven once the first target is reached.
What makes EUR/GBP one of the top DailyFX trades for 2017? See our forecast and find out!
