Forex: EUR/GBP Technical Analysis – Passing on Long Trade Setup
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Talking Points:
EUR/GBP Technical Strategy: Pending
Support: 0.8258 (23.6% Fib ret.), 0.8219 (14.6% Fib ret.)
Resistance: 0.8308-20 (38.2% Fib ret., trend line), 0.8370 (50% Fib ret.)
The Euro began to rebound against the British Pound as expected after showing a bullish Piercing Line candlestick formation. Near-term resistance is now in the 0.8308-20 area, marked by a falling trend line set from late October and the 38.2% Fibonacci retracement. A break above this barrier targets the 50% Fib at 0.8370. Alternatively, a turn back below the 23.6% level at 0.8258 aims for the 14.6% retracement at 0.8219.
A long trade with a target near the 0.83 figure and a stop on a close 0.8219 seems acceptable from a risk/reward perspective. We will opt not to fight the dominant down trend however and look for any further gains as an opportunity to narrow down an attractive short setup.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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