EUR/GBP drifts lower on Tuesday

The EUR/GBP pair broke down a bit during the trading session on Tuesday, reaching towards the 0.8725 level. I believe that the market should have plenty of support down to the 0.87 level, as it is important. I believe that the overall consolidation between the 0.87 level and the 0.90 level. The market continues to be stuck in those areas, and I don’t see that changing anytime soon. This is because the market is paying attention to the negotiations between the European Union and the United Kingdom, which of course are going to be very crucial. Headlines coming out of the mouths of politicians of course can move the market, but it’s going to be very difficult to quantify what happens back.

I believe that the market being closer to the bottom of the overall consolidation area suggests that we are more likely to go higher than lower, and I think buying is probably the prudent thing to do on signs of support or on signs of some type of bounce. An impulsive candle is what I would like to see to start putting money to work, and perhaps aiming towards the 0.88 level initially, followed of course by every handle above.

If we did breakdown below the 0.87 level, the market could go down to the 0.86 level. That’s an area that has been important in the past as well, but I don’t think that we will see that happen until we get some type of major news coming out of those places.