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Talking Points:

• EUR/GBP Technical Strategy: Flat

• Support: 0.7060, 0.6930, 0.6874

• Resistance: 0.7097, 0.7141, 0.7206

The Euro paused to consolidate after testing the resistance capping gains since early May against the British Pound. A daily close above falling trend line resistance at 0.7097 exposes the 38.2% Fibonacci retracement at 0.7141. Alternatively, a turn below the 23.6% level at 0.7060 opens the door for a challenge of the 0.6930-50 area (July 17 and August 5 lows).

Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now, waiting for an actionable opportunity to present itself.

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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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