Forex: EUR/GBP Technical Analysis – Euro Sold vs. the British Pound

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Talking Points:

  • EUR/GBP Technical Strategy: Short at 0.8357
  • Support: 0.8325 (23.6% Fib ret.), 0.8293 (38.2% Fib ret.)
  • Resistance: 0.8377 (Mar 13 high)

The Euro may be readying to turn lower against the British Pound after prices put in a bearish Dark Cloud Cover candlestick pattern below the 0.84 figure. Negative RSI divergence bolsters the case for a downside scenario. Initial support is at 0.8304, the 23.6% Fibonacci expansion, with a break below that exposing the 38.2% level at 0.8259. Near-term resistance is at 0.8377, the March 13 high.

We opted against selling the pair last week but a shallow recovery has now augmented risk/reward parameters, allowing for viable short entry setup. We will trigger the trade here, with a stop-loss set to trigger on a daily close above 0.8377. Profit on half of the position will be booked at 0.8304, at which point the stop-loss on the remainder will be trailed to the breakeven mark.

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dailyclassics_eur-chf_body_Picture_11.png, Forex: EUR/GBP Technical Analysis – Euro Sold vs. the British Pound

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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