Euro falls again Sterling as ECB suggest rates stay low for extended time

The EUR/GBP pair initially tried to rally during the trading session on Thursday but found the 0.8750 level to be a bit too resistive to continue going higher. The resistance was further exacerbated by Mario Draghi suggesting that the European Central Bank will keep interest rates lower for an extended time frame, meaning that the EUR is probably going to lose a bit of support. However, the market will focus on those negotiations, because if the United Kingdom get some type of bad deal, that could put support in the market.

I’m not looking for some type of melt down, rather a gentle grind towards the 0.8650 level. Obviously, we still have the headline risk out there when it comes to this pair, so keep that in mind. I think that the market will continue to be very noisy, but we are starting to see a bit of negativity, and that is starting to change the minds of a lot of traders. I still believe that this is a short-term focused currency pair, so you should be using short-term charts to trade it. I still believe that the market has support and resistance every 50 pips or so, so keep that in mind as well. I look at the 0.8650 level is the target, but I also recognize that the 0.87 level could be a bit of support.