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Talking Points:
- EUR/GBP Technical Strategy: Pending Short
- Support: 0.8167 (Jan 22 low), 0.8141 (50% Fib exp.)
- Resistance: 0.8190 (38.2% Fib exp.), 0.8220 (channel bottom)
The British Pound resumed its push higher against the Euro late last week, clearing support at 0.8190 marked by the 38.2% Fibonacci expansion to expose the January 22 low at 0.8167. A break below this boundary initially exposes the 50% level at 0.8141. Alternatively a reversal back above 0.8190 aims for rising channel bottom support-turned-resistance at 0.8220.
Prices are trading too close to relevant support to justify a short position on risk/reward grounds. On the other hand, entering long lacks confirmation of an upside reversal. We will stand on the sidelines for now, looking for an opportune setup to sell the pair in line with the broad-based down trend.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com