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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Support: 0.7953, 0.7873, 0.7777
- Resistance: 0.8057, 0.8148, 0.8267
The Euro may be topping against the British Pound after prices produced a bearish Dark Cloud Cover candlestick pattern. Near-term support is at 0.7953, the 14.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 0.7873-96 area marked by the July 23 low and the 23.6% level. Alternatively, a push above the 0.8033-57 zone (June 25 high, channel top) opens the door for a challenge of a longer-term 38.2% Fib retracement at 0.8148.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the short side is premature. With that in mind 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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