EUR/GBP continues to be consolidation at best

The EUR/GBP pair has struggled at the 0.88 level again, rolling over and reaching towards the 0.8750 level. This is the middle of the overall consolidation, as I see it extending down to the 0.87 handle. The market will continue to bounce between these couple of levels, and I think that a range bound system is the best way to play this market. As you can see on the hourly chart, I have the stochastic oscillator, and it does look a bit oversold, but I think the bigger picture of course is that we go back and forth between these levels.

Once we break out of this range, then I think the next 100 pips will be decided. If we break above the 0.88 handle, the market then goes to the 0.89 level. Otherwise, if we break down below the 0.87 level, the market probably goes down to the 0.86 handle. The meantime though, you should play this is a range bound marketplace until it proves itself otherwise, and I like the idea of looking at it as such, as it gives us clearly defined levels from which to play. I would keep my position size small though, because quite frankly, you can get whipped around rather quickly in this marketplace as beyond the obvious geopolitical concerns, we have the entire situation in Italy, and of course the entire situation with the United Kingdom leaving the European Union. In other words, this is a mass.