EUR/GBP Technical Analysis: 3-Month Range Floor Support Exposed
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- EUR/GBP Technical Strategy: Short at 0.8824
- Euro recoils from resistance, suffers worst two-day drop in over a month
- Short position activated, looking for a retest of recent range floor support
The Euro looks vulnerable to deeper losses after suffering the worst two days in over a month against the British Pound. Prices recoiled from resistance capping the upside since mid-October after putting in a bearish Evening Star candlestick pattern, with the medium-term range floor now in the crosshairs.
From here, a daily close below the 0.8733-46 area (September 27, November 1 lows) opens the door for a test of the 38.2% Fibonacci expansion at 0.8689. Alternatively, move back above former support in the 0.8842-65 zone, now recast as resistance, paves the way for a retest of the 38.2% Fib retracement at 0.8925.
Technical and risk/reward parameters appeared compelling and a short EUR/GBP position was activated at 0.8824, initially targeting 0.8746. A stop-loss will be triggered on a daily close above 0.8865. Profit on half of the trade will be booked and the stop moved to breakeven when (and if) the first objective is met.
Not sure where to start on your EUR/GBP trading strategy? Check out our beginners’ guide!