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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 dropped to the lowest level in over 7 years against the British Pound, invalidating the bullish reversal signal noted earlier in the week. Near-term support is at 0.7219, the 61.8% Fibonacci expansion, with a break below that on a daily closing basis exposing the 76.4% level at 0.7131. Alternatively, a turn above the intersection of trend line resistance and the 50% Fib at 0.7290clears the way for a challenge of the 38.2% expansion at 0.7361.
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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