Euro falls against Sterling during Wednesday session.

The EUR/GBP pair fell a bit during the day on Wednesday, reaching down towards the 0.8725 handle, but I think the major support level is to be found closer to the 0.87 handle. I believe that short-term rallies will probably sell off, until of course we can break above the 0.88 handle. I think that the market will continue to be choppy and noisy, but ultimately we are still consolidating, regardless of the bearishness that we have seen over the last couple of sessions. The market continues to be noisy based upon headlines and of course conflicting signals coming out of the Bank of England and the European Central Bank.

The central banks from both countries look likely to hold their rates very low, and I believe that the market should continue to be erratic to say the least, because we are trading based upon perceptions of interest rates, and of course negotiations between both of these economies as the United Kingdom leaves the European Union. The market looks likely to offer plenty of opportunities to both buyers and sellers, but right now looks as if the sellers are going to be in charge for the near-term, followed by buyers coming back into the market somewhere between here and 0.8675.

I believe it’s not until we get the negotiations out of the way that we will get longer-term clarity in this market, as the various possible outcomes will continue to be a major problem to deal with overall, as the words coming out of the mouth of politicians are going to be difficult to gauge at times.