EUR/GBP Technical Strategy: Flat
- Euro manages four-day winning streak vs British Pound
- Gains appear corrective within a broader bearish trend
- Waiting for signs of topping to look for short trade setup
The Euro continues to recover against the British Pound as expected, but the overall trend continues to a bearish bias for the single currency. Prices have managed four consecutive days on the upside but the series of lower highs and lows set from late September 2017 continues to define the dominant trajectory.
From here, a daily close above the 50% Fibonacci retracement at 0.8794 opens the door for a challenge of the 61.8% level at 0.8835. Alternatively, a turn back below the 38.2% Fib at 0.8753 paves the way for a retest of the 23.6% retracement at 0.8702.
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Current positioning seems too congested to justify taking a trade one way or another from a risk/reward perspective. Waiting for the upswing to show clear signs of topping to look for selling opportunities in line with the prevailing bias seems sensible. In the meantime, staying flat is probably most prudent.
EUR/GBP TRADING RESOURCES
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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