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- EUR/GBP Technical Strategy: Flat
- Support: 0.8080 (channel floor), 0.8056 (100% Fib exp.)
- Resistance:0.8104 (76.4% Fib exp.), 0.8133 (61.8% Fib exp.)
The Euro may be readying to correct higher against the British Pound after prices put in an Inverted Hammer candlestick at falling channel support set from late April. Initial resistance is at 0.8104, the 76.4% Fibonacci expansion, with a break above that exposing the 61.8% level at 0.8133 (this level is bolstered by the channel top). Alternatively, a break below support (now at 0.8080) clears the way for a challenge of the 100% Fib at 0.8056.
A Hammer candlestick speaks to indecision and does not amount to a defined reversal signal. Furthermore, prices are wedged too tightly between near-term up- and down-side barriers to justify a trade from a risk/reward perspective. On balance, we remain flat.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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