The EUR/GBP pair fell during the Tuesday session, breaking the bottom of the hammer from the Monday session. Because of this, I believe that we will see this market continue to go lower, but I’m not foolish enough to believe that it’s going to be easy going. After all, there is a significant amount of noise right at the 0.70 level, as it is a large, round, psychologically significant number. Yes, the Euro fell during the day significantly, but at the end of the day I think that the Euro still have some resiliency.
I believe ultimately this pair will probably grind its way lower but I also recognize that we are working on a very significant support barrier. I think that there will be continued choppiness going forward, as the markets find themselves challenged buying not only a lot of noise, but a lot of economic confusion.
Let us not forget it is summertime
We can forget that its summertime, and that means less liquidity. Quite frankly, it’s difficult to imagine a large and long-term move happening anytime soon, and as a result it’s very likely that the markets will remain choppy, at least for the next couple of weeks. Nonetheless though, I believe that the only thing you can do is sell this market, as we are most certainly in a downtrend. I will watch the longer-term charts as well though, recognizing that if we get some type of supportive candle on perhaps a weekly or better yet a monthly chart, we could have a trend reversal. However, at this point in time it doesn’t look very likely as the British pound is at least holding its own against the US dollar, something that Euro really is in doing at the moment. Remember, when you’re trading 2 currencies you are trading relative strength, and right now although the Euro has stopped melting down, it still isn't exactly the strong currency that you want to be holding.
