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Talking Points:

• EUR/GBP Technical Strategy: Flat

• Support: 0.7819, 0.7777, 0.7740

• Resistance: 0.7880, 0.7915, 0.7950

The Euro may be readying to turn lower anew against the British Pound after prices put in a Hanging Man candlestick. A daily close below the October 3 low at 0.7819 exposes 0.7777, the July 2012 bottom. Alternatively, a push through the 0.7873-80 area marked by the July 23 low and the 38.2% Fibonacci retracement clears the way for a challenge of the 7908-15 zone bracketed by a previously broken triangle pattern bottom and the 50% level.

A Hanging Man candlestick is indicative of indecision and does not amount to an actionable short trade signal by itself without confirmation. As such, we will remain on the sidelines for now until a viable entry opportunity presents itself.

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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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