The EUR/GBP pair drifted lower on Monday, but then speeded to the downside as the Europeans came on board. It looks as if the 0.88 level will be tested again, but that’s an area that has been rather supportive and reliable in the past, so I think some type of bounce is more than likely going to happen, and as you can see on the hourly chart, the stochastics are in the oversold area, and looking likely to cross over. I believe that a rally from here should send this market back to the 0.89 level, an area that is essentially “fair value” for the overall consolidation.
The overall consolidation area starts at the 0.88 handle, with the 0.90 level above being resistance. Overall, I think that the market will continue to go back and forth, as we await to see with the results of the negotiations between the European Union and the United Kingdom will produce. I think it’s can be difficult to trade this market for the longer-term standpoint, so as we get down to the bottom of the overall consolidated region, it makes sense to start buying. Remember, this pair has much more value per tick, so it doesn’t take as much of a move to make money. If we do break above the 0.90 level, and I think we will longer-term, then it becomes more of a “buy-and-hold” situation, aiming towards the 0.93 level above which is proven to be resistance.
EUR/GBP Video 09.01.18
This article was originally posted on FX Empire