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Talking Points:
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EUR/GBP Technical Strategy: Flat
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Support: 0.7803 0.7728 0.7654
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Resistance: 0.7896 0.7953 0.8030
The Euro declined as expected against the British Pound after prices produced a bearish Dark Cloud Cover candlestick pattern. Near-term support is at 0.7803 the 38.2% Fibonacci expansion with break below that on a daily closing basis exposing the 0.7728-51 area marked by the July 2012 low and the 50% level. Alternatively a turn above the 0.7873-96 zone (July 23 low 23.6% Fib) opens the door for a challenge of the 14.6% expansion at 0.7953.
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 long 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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