EUR/GBP rallies during the thin Friday session

The EUR/GBP pair rallied a bit during trading on Friday, as the volume is very thin. I believe that the market will continue to offer buying opportunities on short-term pullbacks, especially considering that the 0.7 level has been so supportive. I believe that’s the bottom of the overall range, with the 0.90 level above being the top of the range. I think given enough time, we should continue to see this market offer plenty of range bound trading, as the United Kingdom and the European Union continue to negotiate the withdrawal of the United Kingdom from the European Union. This market will move based upon headlines more than anything else, and I think eventually we will get a move, but we are months away from that happening. In the meantime, enjoy these range bound trading conditions that we are in, and keep an eye on this pair for short-term opportunities.

Since we are so close to the bottom of the trading range overall, I believe that buying is the most prudent thing to do. If we did breakdown to a fresh, new low, then the bottom would fall out of this pair and we would probably go looking towards the 0.86 handle, followed by the 0.85 handle. However, unless we get some type of massive headline coming out of the negotiations, it’s very unlikely that we will see that type of move. Expect a lot of volatility more than anything else.