DailyFX.com -
To receive Ilya's analysis directly via email, please SIGN UP HERE
Talking Points:
-
EUR/GBP Technical Strategy: Flat
-
Euro puts in bearish candle pattern, hinting a top may be in the works
-
Adverse risk/reward, absence of confirmation argue against taking short
The Euro put in a bearish Dark Cloud Cover candlestick pattern after hitting a two-month high against the British Pound, hinting a move lower may be ahead. Follow-through has been lackluster so far however, with prices locked in a narrow range near the 0.87 figure.
Near-term support is at 0.8696, the 23.6% Fibonacci retracement, with a daily close below that opening the door for a test of the 38.2% level at 0.8640. Alternatively, a push above the 23.6% Fib expansion at 0.8754 sees the next upside barrier at 0.8810, the 38.2% threshold.
Current positioning does not seem to offer an attractive trading opportunity. The available trading range is too narrow to justify taking on exposure from a risk/reward perspective. Furthermore, the bearish reversal is yet to be confirmed with a clear break of the near-term uptrend. On balance, holding flat seems best for now.
What makes EUR/GBP one of the top DailyFX trades for 2017? See our forecast and find out!
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from IG.