The EUR/GBP pair went sideways initially during the trading session on Thursday, but then shot higher, reaching towards the 0.89 handle. On a break above that level, I think the market goes higher, based upon an ascending triangle that I see on the chart, showing strength in the EUR, and of course the overall distrust of the British pound currently. I think longer-term, traders are going to favor going long in this pair, because of the European Union and the certainty that goes along with the established economy. Ultimately, I think that it comes down to being comfortable more than anything else. The currency pair tends to be very choppy, as the economies are so intertwined, and that of course makes quite a bit of sense as we have a lot of headlines coming out of the negotiations from both Brussels and London, and as a result it’s likely that we will get sudden moves.
The ascending triangle measures for a move towards the 0.90 level, which is a massive resistance barrier, and the top of a longer-term consolidation range. If we can break above the 0.90 level, then I think we go to the 0.93 level after that as it was the most recent high. A break above there could have this market go looking towards the 0.95 level, and then eventually the parity level. I think given enough time, parity is the goal, but it is probably going to take a long time to get there. I have no interest in shorting this market until we break way down below, perhaps below the 0.88 handle.
EUR/GBP Video 29.12.17
This article was originally posted on FX Empire
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