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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 may be readying for another push lower against the British Pound prices produced a bearish Dark Cloud Cover candlestick pattern below resistance in a falling trend line cluster (now in the 0.8255-0.8321 area). Near-term support is at 0.8167, the January 22 low. Alternatively, a reversal through the trend line cluster exposes the 38.2% Fibonacci retracement at 0.8390.
The emergence of positive RSI divergence hints at ebbing bearish momentum and warns a larger upside reversal may be brewing. With that in mind, we will opt not to enter short for the time being until a clear-cut directional breakout resolves current consolidation.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com