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Talking Points:

  • EUR/GBP Technical Strategy:Flat
  • Euro testing trend-defining resistance vs. Pound as recovery accelerates
  • Breakout confirmation needed to make for an actionable long trade setup

The Euro returned to the offensive against the British Poundas expected, with prices now challenging a trend-defining technical resistance threshold. The pair advanced after putting in a bullish Piercing Line candlestick pattern. The formation of a Rising Wedge chart setup typically carries broadly bullish implications.

Pivotal resistance comes in at 0.8922 (Wedge top, 23.6% Fibonacci expansion), with a break above that confirmed on a daily closing basis opening the door to challenge the 38.2% level at 0.9067. Alternatively, a move back below former resistance at 0.8806 exposes the January 25 low at 0.8687 anew.

Prices are too close to resistance to justify entering long from a risk/reward perspective. Furthermore, the Wedge setup needs confirmation on a close above its upper boundary to be actionable. Meanwhile, taking the short side without a viable reversal signal seems premature. On balance, staying flat seems prudent.

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Euro Uptrend Set to Accelerate?

Source https://www.dailyfx.com/forex/technical/home/analysis/eur-gbp/2018/02/06/EURGBP-Technical-Analysis-Euro-Uptrend-Set-to-Accelerate.html?DFXfeeds=forex:technical:home:analysis:eur-gbp



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