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The Euro has dropped to a three-month low against the British Pound after producing the longest consecutive losing streak since late March. Sellers are testing support in the 0.8157-65 area, the intersection of the February 17 low, the 38.2% Fibonacci expansion and the bottom of a falling channel. A break below this barrier targets the 50% level at 0.8093. Near-term resistance is at the 0.82 figure, with a daily close above that exposing the channel top at 0.8226.
Risk/reward considerations argue against entering short with prices sitting squarely at relevant support. On the other hand, taking up the long side looks premature without a defined bullish reversal signal. We will remain flat for now, waiting for an actionable opportunity to emerge.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com