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- EUR/GBP Technical Strategy: Flat
- Support: 0.8167 (Jan 22 low)
- Resistance: 0.8255-0.8321 (trend line cluster), 0.8390 (38.2% Fib exp.)
The Euro is attempting to launch a reversal against the British Pound as prices grind through resistance in the 0.8255-0.8321 area marked by a cluster of falling trend lines. A break above this region exposes the 38.2% Fibonacci retracement at 0.8390. Alternatively, a turn back below 0.8255 sees support at 0.8167, the January 22 low.
Our decision not to pursue a short trade having noticed positive RSI divergence is proving prudent. We will remain on the sidelines for the time being to see if prices are able to clear trend line resistance, confirming a larger reversal and arguing in favor of a long trade bias. The dominant long-term trend remains bearish however and we will likewise keep our eyes open for signs of downward reversal to enter short.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com