The EUR/GBP pair fell during the session on Friday, breaking below the 0.7950 level. This of course is a fairly negative sign, as the downtrend seems to be in full effect, and should continue to extend much lower. I believe that the market should go as low as the 0.75 level, this is the next large, round, psychologically significant number, and therefore should have plenty of support added based upon longer-term charts. In fact, I believe that the 0.75 level is significantly supportive based upon a longer-term chart, and then I believe that the market will probably stop falling at that point.
In the meantime, I believe that any rally from here should continue to be sold off in the longer term, as the downtrend has been so strong. The 0.80 level should be massively resistant, as the area was so supportive previously. With this, I believe that the market is one that short-term traders will be attracted to, simply because the PIP value is higher than most other currencies pairs, and the trend is so strongly defined.
One way trading, only losers pick the bottom.
This is the type of market that simply cannot be argued against, and only the foolish would try to pick the bottom of this move. I believe that until we move above the 0.8150 handle, is going to be difficult, if not impossible, to start buying this market. After all, the British pound has broken out significantly against the US dollar, and that of course suggests that the British pound is going to continue going higher and value, pushing this pair lower. The British pound is by far one of the stronger currencies out there right now, so I believe that this trend will continue for the time being. However, you have to watch the GBP/USD pair, and that once we get to the 1.75 handle, there could be a pullback. This should be a great marketplace to come to again and again, and it is one that I will be watching for the next several handles.