The EUR/GBP pair isn't necessarily the most exciting one to follow. However, as part of my analyst duties I have to follow this pair for a few clients. It is because of this that I was aware of fact that the market fell during the session on Thursday. Then again, the Euro fell against almost everything. This was seen against the US dollar, gold, the Yen, and the entirety of stocks.
However, by the end of the session we did see a bit of a bounce in some of the other markets, and as a result it got me thinking about this pair. On one hand, we have the Euro that was talked down by the European Central Bank Chairman Mario Draghi, but on the other we have the fact that the British pound represents an economy that is shedding cash quicker than it can be counted. There are fears of a "triple dip recession" in the United Kingdom now, and as a result we should see continued weakness in the Pound.
However, when I look at this chart I do recognize the fact that the Thursday candle suggests that we are going to continue falling. If you look at the attached chart, you can see that I have to redlines, one place that the 0.85 handle, and the other place of the 0.84 handle. This is because when I look at the longer-term charts, I can recognize the fact that this area that had been so resistive previously was about 100 pips thick.
0.84
Think I believe that the real support ends at the 0.84 handle. You can see that there is a significant cluster from a couple weeks ago at that level and looking at the longer-term charts there is a case to be made 40.84 to be supportive as well. Is because of this that I believe that this market will continue to fall, but should find some type of support between the 0.85 and 0.84 handles. Looking at this chart, I believe that the best route is to simply "what the market come to you", and buy at lower prices.
