EUR/GBP shows signs of life again during the week

The EUR/GBP pair initially fell during the week, but then turned around to form a big hammer. The hammer of course is a very bullish sign, and I believe that as we are pressing against the 0.88 level, it’s likely that if we get above there we could continue to go higher. That should move the market to the 0.90 level above, and I think that every time we pull back, buyers will probably be interested. However, we have been grinding lower over the longer term, so I think that the move will course be very noisy. That’s been the case for some time now though, as we have been discussing the United Kingdom leaving the European Union.

If we were to break down below the 0.86 level, I think that opens the door to the 0.83 level. That is an area that has been massively supportive in the past, but I think it looks as if we are going to try to break above the 0.88 level and go looking towards the 0.90 level after that. The market should continue to be a bit difficult, and I think longer-term traders are a bit shy when it comes to putting money to work in this market. Scalpers on the other hand love this market though, as it has been somewhat reliable with its support and resistance levels, essentially every 50 pips or so. Keep your position size small regardless of what you do, this market is essentially headline driven currently.