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Talking Points:

• EUR/GBP Technical Strategy: Flat

• Support: 0.7898, 0.7864, 0.7802

• Resistance: 0.7941, 0.8033, 0.8074

The Euro is testing pivotal support at the bottom of a falling channel encasing price action against the British Pound since late July. A daily close below the channel floor at 0.7898 exposesthe 38.2% Fibonacci expansion at 0.7864. Alternatively, a turn above the 23.6% level at 0.7941 opens the door for a test of 0.8033, a level marked by the channel and the June 25 high.

Risk/reward considerations argue against entering short with prices sitting at support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. 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

original source

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