Euro continues to chop around against Sterling on Friday

The EUR/GBP pair initially try to rally during the day on Friday but then pulled back again to test the 0.87 level for support. This is a market that continues the chop around overall, but I think that the overall downtrend on the short-term charts is going to continue. It’s been very choppy, and it’s been a gradual grind to the lower right-hand side of the chart. I believe that this market continues to find plenty of support underneath at the 0.86 handle as well. If we break down below there, the market then unwinds to the 0.83 level as it is a major support level on the longer-term charts.

It doesn’t take much imagination to see a bearish flag on this chart, but ultimately I think that we could get a bit of a bounce before seeing that selling pressure again. The 0.88 level above is massive resistance, so I’d be surprised to break above there. I think that if we rally from here, it will give us a bit of value in the British pound that we can take advantage of. I have no interest in buying anytime soon, and therefore it’s essentially a “cell the rallies” type of situation, especially if there is a lot of exhaustion. Otherwise, if we break down to a fresh, new low, the market then continues to go much lower at that point.

EUR/GBP Video 21.05.18