EUR/GBP Technical Analysis: Euro Uptrend Struggling to Extend
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EUR/GBP Technical Analysis: Euro Uptrend Struggling to Extend

DailyFX.com -

EUR/GBP Technical Strategy: Flat

  • Euro struggles for direction after dropping back to trend support
  • Upward bias remains intact but follow-through now looks suspect
  • Technical resolution, improved risk/reward setup needed to trade

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The Euro is struggling to find lasting upside follow-through against the British Pound but the bounds of the near-term uptrend remain intact. A would-be breakout foundered as prices turned lower after showing a bearish Dark Cloud Cover candlestick pattern on the four-hour chart, as expected .

Turning to the daily chart, the pair is wedged between rising trend support set from mid-June - where the outer layer is now at 0.8974 - and an inflection point marked by the October 2017 high at 0.9033. A break lower exposes the 0.8938-46 area (August 31 low, 38.2% Fibonacci retracement). Alternatively, a push above resistance targets the 0.9091-99 area (August 28 high, 38.2% Fib expansion).

Current positioning does not offer an attractive trade opportunity. Perhaps most importantly, congested price action makes even shorter-term tactical bets appear unattractive on risk/reward grounds. Opting to remain flat seems prudent until better-defined opportunity presents itself.

EUR/GBP TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitte r

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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