The EUR/GBP pair has been falling for quite some time, and recently had broken down below a significant support level in the form of the 0.7875, bouncing back to retest it for resistance, and finding it. That being the case though, it appears that the market still has a little bit of a fight left in it to the upside. If we do bounce from here, it’s very likely that the 0.7875 level will continue to put a bit of a lid on the marketplace, allowing the sellers to come back in and push this pair back down. With that, I don’t have any interest in buying this market although technically there was a hammer form for the session.
The negative look of this market still remains, even with a slightly supportive candle. After that though, all I can say is that the market cannot be bought into we get above the 0.79 handle, something that I don’t see happening right now, and quite frankly wouldn’t claim be enough for me to be confident going long. In order to be confident, we would be looking at closer to the 0.8050 or so.
European Union continues to struggle
I believe that the European Union will continue to struggle going forward, and because of that I don’t see any reason to go long of the Euro against any currency, except for perhaps the Japanese yen. The British pound is trying to find a bit of support near the 1.62 level against the US dollar, so having said that I feel that the market will continue to favor the British pound overall, because quite frankly the United Kingdom is in a little bit better shape.
I still believe that this market drops down to the 0.75 level, and as a result I have no interest in going long. If we do break out above the 0.8050 level of, I think at that point in time you would have to consider that the trend may be changing. Until then though, sell rallies as they appear.
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