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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.7903, 0.7880, 0.7861
- Resistance:0.7924-34, 0.7971, 0.8024
The Euro may be gearing up for a rebound against the British Pound after prices put in a bullish Morning Star candlestick pattern. A daily close above resistance in the 0.7924-34 area, marked by a falling trend line set from March and a channel top in play since June, opens the door for a test of support-turned-resistance at 0.7971 (June 13 low). Alternatively, a reversal below support at 0.7903, the 23.6% Fibonacci expansion, clears the way for a move to the 38.2% level at 0.7880.
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal argues against taking up the short side. We will remain flat for now.
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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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