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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.7873, 0.7788, 0.7728
- Resistance: 0.7953, 0.8033, 0.8084
The Euro is attempting to regain traction against the British Pound, rising for a second consecutive day having dropped the most in 9 months. Near-term resistance is at 0.7953, the 14.6%Fibonacci expansion, with a break above that on a daily closing basis exposing range top resistance at 0.8033. Alternatively, a reversal below the 0.7873-96 area marked by the July 23 low and the 23.6% level opens the door for a challenge of the 0.7788-0.7803 zone (September 30 close, 38.2% Fib).
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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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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