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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.8326 (23.6% Fib exp.), 0.8281 (38.2% Fib exp.)
- Resistance: 0.8399 (Mar 19 high)
The Euro may be readying to turn lower against the British Pound once again after prices put in a Bearish Engulfing candlestick pattern. Initial support is at 0.8326, the 23.6% Fibonacci expansion, with break below that exposing the 38.2% level at 0.8281. Near-term resistance is at 0.8399, the March 19 high. A daily close above this barrier invalidates the Bearish Engulfing setup.
Prices are too close to relevant support to justify a short position from a risk/reward perspective. On the other hand, entering a long trade looks premature absent a defined bullish reversal signal. We will continue to stand aside for now, waiting for a more attractive setup to present itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com