The EUR/GBP pair has rallied significantly during the trading session on Friday, reaching towards the 0.8850 level. If we can clear this level cleanly, I believe that the market will then go looking towards the 0.90 level above, which has been the top of the overall consolidation area for the last several months. As we continue to go through negotiations between the European Union and the United Kingdom, I think that we will continue to get a lot of noise in this market. However, I do believe that the upside is more than likely going to be the best way to go, as stability in the European Union is probably going to be favored since we don’t know how things you can end up in the United Kingdom after the breakup. I think this is a natural reaction for most traders, as they prefer the known.
Because of this, we will more than likely eventually break out above the 0.90 handle, and once we do, we should go to the 0.93 handle. Ultimately, I believe that this pair could go to parity, but it’s going to take a while to get there. However, if we were to break down below the 0.88 handle, I think the market then could breakdown to the 0.86 level below which has been massively supportive. Ultimately, I think the noise in this in this market will continue, so keep being a small position and adding as we rally is probably the best way to go. Quite frankly, I would be a bit surprised if we break down and would not trust that move is much as I would a move to the upside.
EUR/GBP Video 18.12.17
This article was originally posted on FX Empire
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