- As I look at the Euro against the British pound, I have to ask a lot of questions of whether or not we are breaking down more significantly than we have seen in the past.
- When I zoom out on the charts going back to approximately the summer of 2016, this is an area that's held since then.
Because of that, if we break down from here, we could see the Euro just crater. That being said, it also somewhat lends itself to being a place for contrarian traders to get involved and start betting against the markets in general. It obviously would be a very difficult ride to the upside, but I think if we get beyond the 0.84 level, then you can have some credence for that.
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On a Drop in this Pair
If we break down below the 0.82 level, then like I said, we really start to drop perhaps all the way down to 0.77 before it's all said and done. That would be a brutal sell-off, but not necessarily something that is out of the realm of possibility. I think both of these economies have major issues, but right now, I think the biggest problem that I know of is probably Germany, and that does not bode well for the euro overall.
The euro is basically a basket case at this point. And I think you continue to have the major issues of the fact that you have all of these countries that have trouble cooperating. We also have the issues in Ukraine and that's not going anywhere. So really at this point in time, while I'm not necessarily overly bullish on the pound, I definitely don't like the euro.That's the main takeaway here. However, I am willing to go either way. If the market tells me, it's time to start buying, then so be it.
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