EUR/GBP Technical Analysis: Looking for Opportunities to Sell
To receive Ilya's analysis directly via email, please SIGN UP HERE
- EUR/GBP Technical Strategy: Flat
- Euro bias still bearish amid consolidation below 0.89 figure vs. British Pound
- Choppy price action, adverse risk/reward setup argue against taking trade for now
The Euro has settled into a narrow consolidation range below the 0.89 figure against the British Pound but overall positioning seems to favor the downside. A break of rising trend line support set from early November suggests bears have the initiative, with the resumption of the drop from August highs potentially at hand.
From here, a daily close below the 38.2% Fibonacci expansionat 0.8796 sees the next significant downside barrier in 0.8728-46 area (September 27 low, 50% level). Alternatively, a reversal back above the 23.6% Fib at 0.8879 opens the door for a retest of trend line support-turned-resistance, now at 0.8912.
The pair is too close to immediate support to justify entering short from a risk/reward perspective. Furthermore, price action within the larger range established in mid-October has been rather choppy, making a clear-cut technical setup difficult to nail down. Opting to wait for greater clarity seems prudent.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.