The EUR/GBP pair doesn’t get enough respect from many of you out there. I believe this is because of the fact that while the EUR/USD pair will move 100 pips, the EUR/GBP pair might move something like 50. However, the pip value is about double, so in the end there really isn’t much in the way of a difference. However, most new traders simply don’t pay attention to such things, and as a result miss out on a nice steady market from which to trade.
The pair has been falling significantly over the last several weeks, and as a result has been a nice downtrend to sell. This pair has quietly made this move while the rest of the world focused on the EUR/USD pair, one that has been whippy from time to time, although in the end did the same thing.
The proximity of the two economies lend to a tight ranging pair, and as the Britons send over 40% of their exports to the European Union, it makes sense that you wouldn’t see massive moves in this pair very often. Because of this, I find this a good pair to pick a direction and simply walk away while the market grinds ahead.
0.80 matters
Looking at the long term charts, the 0.80 level is a point of “balance” in this market. The market seems to be attracted to it, and this is why I think the level should be an important one for the future of this market. Because of this, I am paying special attention to the pair for any significant move.
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The 0.81 level above looks resistive, and as a result I think I will sell any rallies up until that number. Any weak candle close to that level would also have me selling. As for the downside, I like selling a fresh low once we break the lows of a couple of weeks ago. This pair looks as if it wants to run lower, perhaps to the 0.75 handle. Because of this, and the issues in Europe overall, I simply cannot buy the Euro at all – even against the Pound.