- The euro initially fell again during the early hours on Wednesday but has since recovered against the British pound to continue the overall noisy consolidation that we have been in for some time.
- With that being the case, I think you have to look at this through the prism of a market that is trying to sort itself out and figure where we are going next.
- But there is a gap above that still needs to be filled, although we came very close to doing so.
- We could find this pair going back to the 0.85 level for no other reason than that gap.
However, it's also worth noting that this is a market that has seen a lot of downer pressure over the last several months. I think the snap elections in France have really put a chill down the spine of most traders that would be willing to hold on to this market. So, I think we have a situation where traders continue to look at this through the prism of potential value play based on longer term charts. But we need to be honest here.
The EUR/GBP market is clearly one that is going to remain volatile and choppy and perhaps even very difficult overall to deal with. Because of this, I think you've got a situation where traders continue to favor buying the dips as they occur and trying to defend 0.84 level. The 0.84 level, of course, is an area that has caused a bit of support in the longer term charts. So, I think right now we may be setting up sideways action between 0.84 and 0.85 above.
Current Environment is All Noise
In this current environment, I expect to see a lot of noisy trading in multiple markets, not just this one. However, as this market does tend to be choppy under normal conditions, I expect it to be even more aggressive here. If we can break above the 0.8550 level, that might bring in a certain amount of FOMO trading.
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