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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.7973, 0.7954, 0.7935
- Resistance:0.8007, 0.8031, 0.8050
The Euro launched upward against the British Pound as expected after prices produced in a bullish Morning Star candlestick pattern. Prices are now in consolidation mode having touched the highest level in two months. A daily close above the 23.6% Fibonacci expansion at 0.8007 exposes the 38.2% level at 0.8031. Alternatively, a move below 0.7973, the intersection of the 38.2% Fib retracement and a rising trend line set from late July, opens the door for a test of the 50% threshold at 0.7954.
The ECB looks to be the most dovish of the leading central banks, putting the Euro at a disadvantage against its major counterparts. With that in mind, we will opt not to pursue a long position and wait for the bounce to produce a selling opportunity.
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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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