EUR/GBP Technical Strategy: Flat
- Euro has scope to extend recovery after trend line break
- Broad trend bias continues to favor EUR/GBP weakness
- Profit booked on second half of short trade from 0.8818
The Euro may have scope to continue higher after mounting a cautious recovery from familiar channel support against British Pound. The overall trend bias continues to favor weakness however, with price action clearly defined by a series of lower highs and lows since late September 2017.
A break above trend line resistance defining the downswing from the March 7 swing top has exposed the 38.2% Fibonacci retracement at 0.8783. A daily close above that targets the 50% level at 0.8818. Alternatively, a move below the 23.6% Fib expansion at 0.8711 eyes triple bottom support at 0.8689.
The trend line break warns of a near-term direction change. With that in mind, the second half of the short EUR/GBP tradetriggered at 0.8818 has been closed after partial profit was booked last week. Standing aside seems prudent for now until a new selling opportunity in line with the broader bias presents itself.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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