The FX markets continue to see a lot of back and forth trading, and the EUR/GBP pair won’t be any different.
EUR/GBP
The euro has been very choppy against the British pound during the trading session on Monday, which makes a certain amount of sense considering we are sitting right at a large round psychologically significant figure in the form of 0.87 as New York opens.
Furthermore, we have to keep in mind that the 50-day EMA sits just below, so that makes a certain amount of technical sense for support as well. Ultimately, I think this is a market that traders will be watching very closely because it has been so range-bound and while most of the interest at the moment is through to the US dollar, the reality is you have to watch this pair to determine which one of these two currencies you want to buy or sell against that US dollar strength or weakness.
Workable Range-Bound Levels
At this point, it looks pretty well balanced and that might be something worth paying close attention to. I don't have any interest in trying to get too big in a position here because quite frankly, this is a market that I think will continue to cause a few headaches from time to time.
I like the idea of perhaps trying to get small positions based on the range going back and forth with the 0.8750 level being a resistance barrier and the 0.8650 level being a support level. Nonetheless, this is still a situation that I think is very choppy and it's probably something that you need to pay close attention to once we break through these moving averages.
If and when we do, then things might be a bit clearer or if we turn around and break above the 0.8750 level that would obviously be very bullish. As things stand right now this shows up as a very workable short-term range-bound trading situation that is basically bouncing around in 25 pips for those who are willing to jump to the smaller time frame.