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EUR/GBP Technical Analysis: Trying to Secure Break of 0.73
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Talking Points:
EUR/GBP Technical Strategy: Flat
Support:0.7206, 0.7141, 0.7040
Resistance: 0.7271, 0.7352, 0.7482
The Euro is probing above the 0.73 figure against the British Pound as prices work on a fourth consecutive day on the upside. Securing a daily close above the 61.8% Fibonacci retracement at 0.7271 would open the door for a test of the 76.4% level at 0.7352. This barrier coincides with a congestion area that served to cap gains on a similarly swift recovery in early June and could prove to be a formidable hurdle for buyers.
Absent confirmation of an upside break on a closing basis, relevant support is marked by the 50% Fib at 0.7206. While the strength of near-term upside momentum has allowed little room for sellers to assert themselves, the possibility of an intraday reversal can’t be dismissed outright considering the elevated levels of volatility in recent trade coupled with the amplifying effects of thin liquidity conditions. If close below 0.7206 is to materialize, the next downside barrier comes by way of the 38.2% retracement at 0.7141.
Positioning is inconclusive at this point. First, confirmation of an upside break through immediate resistance is absent. What’s more, a close at current levels would put the pair too close to the 76.4% Fib to justify entering long from a risk/reward perspective. Finally, while resistance ahead seems potent, the absence of a clearly defined bearish reversal signal warns that taking up the short side is premature, especially considering the intensity of recent upside momentum. We will remain flat for now.
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