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EUR/GBP Technical Analysis: Rejected at Two-Month High
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Talking Points:
EUR/GBP Technical Strategy: Flat
Euro turns lower as expected after forming bearish candle pattern
Risk/reward considerations argue against entering a trade for now
The Euro turned lower against the British Pound as expected after prices put in a bearish Dark Cloud Cover candlestick pattern having hit a two-month high. The single currency is attempting to regain upside momentum but thus far, bottoming confirmation is elusive.
A daily close above support-turned-resistance at 0.8640, the 38.26% Fibonacci retracement, opens the door for a retest of the 23.6% level at 0.8696. Alternatively, a push below the 50% Fib at 0.8595 sees the next downside barrier marked by the 61.8% retracement at 0.8550.
An actionable trade setup is absent at this time. Perhaps most critically, the available trading range is too narrow relative to ATR to justify taking a trade from a risk/reward perspective. As such, observing from the sidelines until a better-defined opportunity presents itself seems best for now.
What makes EUR/GBP one of the top DailyFX trades for 2017? See our forecast and find out!
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