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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Negative RSI divergence hints Euro downturn brewing vs British Pound
- Downturn confirmation absent, near-term price trend still points upward
The Euro may be carving out a top above 0.91 against the British Pound as early signs of negative RSI divergence point to ebbing upward momentum. Still, a series of higher highs and lows set from mid-July keep the immediate trend bias favoring the upside.
Near-term term resistance is at 0.9150, the 38.2% Fibonacci expansion, a daily close above that opening the door for at challenge of the 50% level at 0.9231. Alternatively, a reversal below rising trend line support at 0.9090 exposes the 23.6% Fib at 0.9051, followed by the 14.6% expansion at 0.8990.
Negative RSI divergence is not sufficient by itself to justify taking a short position without further confirmation. It is enough of a warning not to try for the long side however, at least for now. With that in mind, opting for the sidelines seems most prudent until greater clarity emerges.
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