EUR/GBP rallies again on Tuesday

The EUR/GBP pair has rallied significantly over the last several hours as Americans continue to push this pair above the 0.88 handle. If we can break above that level, it’s likely that we could go to the 0.89 level, and then possibly the 0.90 level. Ultimately, I think that the market will continue to see a lot of volatility, especially considering that we are still going through the negotiation process essentially. If we do break down from here, I would anticipate a lot of people looking to pick up value closer to the 0.87 level, an area that has been important more than once. I also recognize that the 0.86 level under there is massive longer-term support.

This has been a very noisy market as of late, and I think that will continue to be the case. I would be very cautious about putting too much money to work here, as headlines can cross the wire add just about any moment to move the market drastically. Remember that the PIP value is almost twice what it is another major pairs, so that of course has an effect as well. On the way up, I believe that the 0.90 level above would be massive resistance, and I think that if we break above there it could spell dark days for the British pound. I don’t think we get there anytime soon though, and I think that more of this back and forth noisy trading will continue to be what we can expect. In general, this is one of my least favorite pairs to trade, but I do recognize that if we get the occasional headline, it does offer short-term volatility.