EUR/GBP breaks major support

By breaking down below the bottom of the consolidation range on Thursday, it looks likely that we will continue to go lower, perhaps reaching towards the next psychologically important level, the 0.86 level. In the meantime, I believe that rallies will be sold as the 0.87 level should offer significant resistance. If we can break above the 0.8750 level, that would free the market to go much higher, but right now I believe that we will continue to see a lot of bearish pressure as this has been a significant move. I believe that the British pound is breaking out around the world, and that of course has an influence over here. The GBP/USD, the GBP/CHF, and many other British related markets have all rally to.

I believe that we will continue to see a lot of volatility in these markets as we have conversations between the European Union and the United Kingdom going on. There is a significant amount of headline risk, so it makes sense that we will see a lot of choppiness. I think that the breakdown during the Thursday session certainly suggesting that the selling of this market is easier to do. Ultimately, the 0.86 level should be the initial target, but we could go lower than that. If we did somehow turn around and break above the 0.8750 level, that should free the market to go towards the 0.88 level next. Regardless, expect choppy trading.