The EUR/GBP pair has initially fallen during the trading session on Monday, but then bounced enough to reach towards the 0.8830 level, which has been resistive over the last several sessions. We have rolled over from there and broken down significantly, and although this is a very negative turn of events, when I look at this chart I am not convinced of a complete breakdown until we get below the 0.8750 level that I am willing to sell. I have certainly been paying attention to this market over the last several hours, so therefore a move below the 0.8750 level is a sell signal for me that sends this market looking towards the 0.86 handle which is massively supportive. The volatility is going to continue, but I believe that if we break above the 0.88 handle, then eventually the buyers will jump into this market and reach towards the 0.8950 level.
Keep in mind that this pair is going to move on headlines coming out of the negotiations between the EU and the UK, so we will continue to see a lot of noise. This is a market that will be the epicenter of the Brexit obviously, so that being the case small positions might be the best way to trade this market, because it would only take a quick headline or comment from a political leader in that region of the world to turn the move around. In general, I believe that the longer-term uptrend continues, as the certainty in the European Union is probably much more appealing for longer-term traders than the UK.
EUR/GBP Video 05.12.17
This article was originally posted on FX Empire