EUR/GBP Technical Strategy: Flat
- Euro at risk of deeper losses after two-month channel break
- Overall positioning makes for bearish longer-term trend bias
- Short trade established above 0.88 figure hit first objective
The Euro looks vulnerable to deeper losses against the British Pound having broken support guiding the near-term trend higher since early January. Overall positioning puts prices within a falling channel established in late September 2017, making for a broadly bearish longer-term bias.
Near-term support comes in at 0.8770, the February 26 swing low, with a break below that exposing the 38.2% Fibonacci expansion at 0.8732. Alternatively, a reversal back above 0.8832 (channel floor support-turned-resistance, falling trend line) opens the door for a retest of a chart inflection point at 0.8904.
Risk/reward parameters after the channel floor break appeared attractive and a short EUR/GBP position was activated at 0.8818. The trade has already hit its initial objective at 0.8770 and profit on half of exposure has been booked. The stop-loss is set to trigger on a daily close above 0.8840.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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