The Euro may have started a significant trend reversal against the British Pound, marked by a break of supporting guiding the rising trend since mid-July. The turn lower followed after prices failed to overcome resistance marked by the high set in the aftermath of the Brexit referendum near the 0.93 figure.
Near-term support is now at 0.9091, the 38.2% Fibonacci retracement, with a break below that confirmed on a daily closing basis exposing the 50% level at 0.9025. Alternatively, a move back above the 23.6% Fib at 0.9174 opens the door for a retest of trend line support-turned-resistance, now at 0.9231.
Technical and risk/reward parameters seemed acceptable to attempt a short position and the trade was activated at 0.9169, initially targeting 0.9091. A stop-loss will be activated on a daily close above 0.9201. Profit on half of the trade will be booked and the stop moved to breakeven once the first objective is met.
