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- EUR/GBP Technical Strategy: Flat
- Support: 0.7899, 0.7860-73, 0.7783
- Resistance:0.7984-97, 0.8074, 0.8136
The Euro launched upward against the British Pound as expected after prices produced in a bullish Morning Star candlestick pattern. Near-term resistance is in the 0.7984-97 area, marked by the 23.6% Fibonacci retracement and the August 1 high. A break above that on a daily closing basis exposes the 38.2% level at 0.8074. Alternatively, a reversal below trend line resistance-turned-resistance at 0.7899 opens the door for a test of the 0.7860-73 region, bracketed by the July 23 low and the 23.6% Fib expansion.
The ECB looks to be the most dovish of the leading central banks, putting the Euro at a disadvantage against its major counterparts. With that in mind, we will opt not to pursue a long position and wait for the bounce to produce a selling opportunity.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com