The EUR/GBP pair had a positive session on Friday, but as you can see we remain stuck in a fairly tight consolidation area. What is even more interesting is the fact that the weekly chart has pretty three shooting stars in a row, all of which are sitting just above the 0.8400 handle. This area is obviously significant support, and looking at the longer-term charts you can also contact that there is a significant amount of support down to the 0.83 handle. Because of this, I feel that this market will struggle to breakdown at this point in time.
Another thing that causes quite a problem for traders who are looking for anything beyond a scalp is the fact that the Euro and the Pound are both doing fairly poorly against the US dollar. Because of this, there's no real strength in this pair in one direction or the other. Having said that, it makes perfect sense that this market continues to go sideways.
Short-term trades
Because of this, I am looking for short-term trades and simply selling out the top of the range, while buying at the bottom. I think that overall this market has a chance to break down, but we need to get below that aforementioned 0.83 level in order to start selling with any significant move in mind. In the meantime, we might as well simply just take what the market is offering us, which is about 50 pips at a time.
As far as breaking to the upside, I'm not necessarily thinking that that's going to happen either. Simply because the 0.84 level has held, doesn't necessarily mean that the 0.85 level is ready to get broken. After all, those shooting stars on the weekly chart do of course suggest that there is serious trouble to the upside.
My suspicion is that this market will probably go sideways for a while, and therefore offer quite a bit of trading opportunities if you are patient enough and have the ability to sit and babysit the positions. It isn't my fairly to trade, but sometimes you have to simply take with the markets willing to give you.