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- EUR/GBP Technical Strategy: Flat
- Support: 0.8030 (38.2% Fib exp.), 0.7992 (50% Fib exp.)
- Resistance:0.8076-81 (May 23 low, 23.6% Fib exp.), 0.8105 (14.6% Fib exp.)
The Euro dropped to the lowest level in 18 months against the British Pound after taking out the May swing bottom. Support is now at 0.8030, the 38.2% Fibonacci expansion, with a daily lose below this barrier exposing the 50% level at 0.7992. Alternatively, a turn back above resistance in the 0.8076-81 area – marked by the 23.6% Fib and the May 23 bottom – clears the way for a challenge of the 14.6% expansion at 0.8105.
While taking a short position at current levels is tempting, emerging signs of positive RSI divergence hint downward momentum may be ebbing. We will tactically opt not to chase the pair lower here.
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Daily Chart - Created Using FXCM Marketscope 2.0