Euro continues to struggle against Sterling

The EUR/GBP pair broke down a bit during the trading session on Friday again, but did bounce eventually as the 0.8625 level has offered a short-term bounce. I think that there is a lot of resistance above though, and I believe that the 0.87 level is a massive “ceiling” in the market. That was an area that was massive support, so it should be massive resistance. I think that into we break above that level, it’s probably a market that you need to sell on signs of exhaustion. I believe that the market will probably go down to the 0.86 handle, perhaps beyond there to the 0.85 level.

When I look at the longer-term charts, I think that we could go as low as the 0.8350 level, but it will obviously take a while to get down there. I believe this market will continue to favor the British pound, as it is looking stronger against the other currencies around the world than the Euro. I anticipate a lot of volatility, especially considering that there are headlines that are going to be coming out of both the United Kingdom and the European Union that could move this market due to the negotiations. Remember that the PIP value in this market is higher than other currency pairs, so we don’t need is big of moves. Ultimately, I believe that the downtrend is going to be the way to play this market, but you need to be looking for value on signs of exhaustion.