EUR/GBP: Waiting for Negative Candles - 24 March 2015

The EUR/GBP pair broke higher during the session on Monday, clearing a bit of resistance at the 0.73 handle. Because of this, it appears of the market is ready to continue going higher, but I do have some concerns just above. I believe that ultimately the 0.74 level is very resistive, and that the resistance probably extends all the way to the 0.75 level at the very least, if not the 0.76 level. This is based upon previous activity over the last several months, and of course the longer-term charts. Ultimately, I think that it’s only a matter of time before we find resistance in that general vicinity and start falling again. It’s not necessarily that I like the British pound, it’s just that I really don’t like the Euro.

I believe that the Euro is getting a little bit of a reprieve from the massive selloff, and that makes sense. After all, markets can’t fall forever, and as a result a bounce would be expected. The 0.70 level offered that bounce, which of course is a large, round, psychologically significant number.

Waiting for negative candles

I am simply waiting for negative candles, as I believe that the longer-term trend should return. If we got above the 0.76 level I might be convinced otherwise, but until then I have no interest whatsoever in buying the Euro against just about anything. I think that this pair is simply seeing a bit of a reprieve, and that we will trying to sell off again in order to build up enough momentum to break down below the 0.70 level. This is basically the same thing is going on in the EUR/USD pair, which is trying to break down below the 1.05 handle. I believe that both pairs will continue to drop, but there does come a point where the Euro has been punished enough. I just don’t think we are quite there yet, and therefore I remain pretty bearish when it comes to the Euro in all things involved.

EURGBP 32415

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.