EUR/GBP Waiting For Selling Opportunity
Dailyfx | Sep 02, 2015 03:29AM ET
- EUR/GBP Technical Strategy: Flat
- Euro Aims at Resistance Above 0.74 Figure Against British Pound
- Gains Seen as Corrective, Waiting to Sell Into Six-Year Down Trend
The euro is attempting to rebuild upside momentum against the British pound after prices found support below the 0.73 figure. The single currency drifted downward having failed to hold up above the 0.74 mark, but the return of risk aversion has proven supportive amid the unwinding of carry trades funded in terms of the low-yielding unit.
Looking ahead, near-term resistance comes in at 0.7432, the 38.2% Fibonacci expansion. A break above this barrier on a daily closing basis exposes the 0.7482-90 area, marked by the June 5 high and the 50% level. Alternatively, a reversal back below the 23.6% Fib at 0.7361 clears the way for a retest of the 14.6% expansion at 0.7317.
The long-term EUR/GBP trend has favored weakness since prices topped in December 2008. With that in mind, any near-term gains appear corrective and our preference is to stand aside while those moves play out, waiting for an actionable selling opportunity to emerge.
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