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Talking Points:
- EUR/GBP Technical Strategy: Pending Short
- Support: 0.8167 (Jan 22 low)
- Resistance: 0.8219 (14.6% Fib ret., channel), 0.8258 (23.6% Fib ret.)
The Euro may be readying to turn higher against the British Pound. Pricing put in a bullish Piercing Line candlestick pattern above support at 0.8167, the January 22 low, hinting a double bottom may be in the works. Breaking above initial resistance at 0.8219 – the intersection of the 14.6% Fibonacci retracement and a previously broken rising channel bottom – exposes the 23.6% level at 0.8258.
Risk/reward considerations argue against taking at trade at current levels given prices’ close proximity to relevant near-term up- and down-side technical barriers. We will opt to remain on the sidelines for the time being.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com