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- 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.