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- EUR/GBP Technical Strategy: Flat
- Support: 0.8219 (14.6% Fib ret.), 0.8167 (Jan 22 low)
- Resistance: 0.8258 (23.6% Fib ret.), 0.8320 (38.2% Fib ret., trend line)
The Euro launched a recovery against the British Pound as expected after prices put in a bullish Piercing Line candlestick pattern above support at 0.8167, the January 22 low. Buyers are testing resistance at 0.8258, the 23.6% Fibonacci retracement, with a break higher targeting the intersection of a falling trend line and the 38.2% level at 0.8320. Alternatively, a reversal below the 14.6% Fib at 0.8219 exposes 0.8167 anew.
Risk/reward considerations argue against entering long with prices trading in such close proximity to relevant resistance. On the other hand, an actionable short trade signal is absent. We will stand aside for now and wait for something more attractive to emerge.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com