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Talking Points:
- EUR/GBP Technical Strategy: Short at 0.7341
- Support: 0.7219, 0.7131, 0.6989
- Resistance: 0.7290, 0.7361, 0.7449
The Euro may mount a reversal against the British Pound having produced a Bullish Engulfing candlestick pattern. Near-term term resistance is at 0.7290, the intersection of trend line resistance and the 50% Fibonacci expansion, with a break above that on a daily closing basis exposing the 38.2% level at 0.7361. Alternatively, a reversal below the 61.8% Fib at 0.7219 clears the way for a challenge of the 76.4% Fib at 0.7131.
We sold EURGBP at 0.7341 and subsequently booked profit on half of the position. The remainder of the positioning remains open to capture any further downward momentum. The stop-loss has been trailed to the breakeven level (0.7341).
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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