The EUR/GBP pair rallied a bit during the trading session on Tuesday, reaching a fresh, new high, but then pulled back slightly in the middle of the day. I think we are starting to rally again though, so I think that this “buy the dips” scenario continues to be the way to play this market. I believe that the 0.88 level is going to continue to be supportive, and I think that we eventually go higher, reaching towards the 0.90 level above, which is massive resistance. Breaking above there should send the market much higher. In general, I believe that this pair continues to be choppy due to the negotiations between Brussels and London, but I think we will continue to see traders out there favor the EU over the UK, as there are quite a few unknowns when it comes to the future of the United Kingdom. Contrast that with the EU, which should stay relatively stable, and therefore somewhat predictable. Currency traders love that, and that will provide a natural lift in a market that has been rallying for some time.
In fact, I don’t have any interest in shorting this market, least not until we break down below the 0.8750 level, which looks unlikely given the current momentum. You can make an argument for an ascending triangle just being broken, and that of course is a very bullish sign as well. I believe that the market continues to attract money to the upside, and that the choppy nature of the market should offer plenty of value trades.
EUR/GBP Video 20.12.17
This article was originally posted on FX Empire