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The Euro fell for a sixth consecutive day against the British Pound, hitting the lowest level in four months. Prices have now overcome support in the 0.8148-65 area, marked by the February 17 low and the 38.2% Fibonacci expansion. Sellers now aim to challenge the 50% level at 0.8093, with a further push beyond that exposing the 61.8% level at 0.8021. Alternatively, a reversal back above 0.8165 opens the door for another test of the 0.8200 figure.
The support break seemingly offers an attractive selling opportunity from a purely technical perspective but we will tactically opt not to pursue the trade. The release BOE inflation report represents major event risk facing the British Pound in the hours ahead and we already hold exposure in the currency via GBPJPY. With that in mind, we prefer to limit risk by avoiding other Pound-based trades in the near-term.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com