EUR/GBP Technical Analysis: Near-Term Trend Points Downward
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- EUR/GBP Technical Strategy: Short at 0.8816
- Euro trend still favors weakness after bounce from familiar range floor support
- Attractive risk/reward setup offered tactical selling opportunity above 0.88 mark
The Euro turned higher after testing familiar range support against the British Pound but the near-term trend still appears to favor the downside. Sterling turned curiously lower following an apparent breakthrough in Brexit negotiations but failed to negative the series of lower highs and lows set from mid-November.
Immediate support is in the 0.8733-46 area (September 27, November 1 lows), with a daily close below that opening the door for a test of the December 8 bottom at 0.8689. Alternatively, a push back above the November 21 low at 0.8842, now recast as resistance, exposes the 38.2% Fibonacci retracement at 0.8925.
Risk/reward parameters appeared favorable for a tactical short just below near-term trend resistance and the trade has been activated at 0.8816, initially targeting 0.8746. A stop-loss will be activated on a daily close above 0.8842. Half of open exposure will be booked upon hitting the first objective.
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