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Talking Points:
- EUR/GBP Technical Strategy: Short at 0.7850
- Support: 0.7740, 0.7663, 0.7539
- Resistance: 0.7802, 0.7864, 0.7906
The Euro appears vulnerable to deeper losses against the British Pound after falling to the weakest level in 26 months. Near-term support is in the 0.7740-51 area, marked by the 61.8% Fibonacci expansionand the July 2012 low, with a break below that on a daily closing basis exposing the 76.4% level at 0.7663. Alternatively, a reversal above the 50% Fib at 0.7802 opens the door for a test of the 38.2% expansion at 0.7864.
We entered short EURGBP at 0.7850and have since taken profit on half of our exposure.The rest remains open to capture reneweddownside momentum. The stop-loss is now at the breakeven level (0.7850).
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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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