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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Euro rally stalls below 0.86 figure against the British Pound
- Overall trend still bearish but actionable trade setup absent
A Euro recovery has paused to digest gains below the 0.86 figure after prices advanced to the highest level since mid-March against the British Pound. The trend since the beginning of the year continues to be defined by a series of lower highs and lows, but at this point just barely so.
From here, a daily close above the May 26 high at 0.8751 opens the door for a test of the 0.8787-94 area (March 3 high, 38.2% Fibonacci expansion). Alternatively, a turn below the 23.6% Fib retracement at 0.8664 sees the next downside barrier at 0.8611, the 38.2% threshold.
A compelling trading opportunity looks to be absent for now. The absence of a defined short trade signal warns against attempting to fade recent gains while proximity to resistance means that betting on continuation is unattractive from a risk/reward perspective. On balance, standing aside seems prudent for now.
What makes EUR/GBP one of the top DailyFX trades for 2017? See our forecast and find out!
