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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.8172-80 (double bottom, 76.4% Fib exp.), 0.8140 (100% Fib exp.)
- Resistance: 0.88204 (61.8% Fib exp.), 0.8224 (50% Fib exp.)
The Euro continued to sink against the British Pound, with prices dropping to a new two-month low after breaking support at 0.8204 marked by the 61.8% Fibonacci expansion. Sellers now aim to challenge the 0.8172-80 area marked by a double bottom dating back to late January and the 76.4% level. A further push below that targets the 100% Fib at 0.8140. Alternatively, a reversal back above 0.8204 aims for the 50% expansion at 0.8224.
The available trading range is too narrow to justify a trade from a risk/reward perspective given a 20-day ATR reading of 36 pips and assuming a stop-loss triggered on a daily closing basis (as is the case with our strategy). As such, we will continue to stand aside for now.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com