Euro falls initially against Pound on Friday but recovers

The EUR/GBP pair has pulled back a bit during the trading session on Friday but found enough support underneath at the 0.8750 level to rally again. I think that this market will continue to be noisy overall, and probably driven by headlines coming out of negotiations between the European Union and of course the United Kingdom. There has been a lot of noise as of late, so that obviously will move these markets. Beyond that, we have troubles in Italy, so that of course causes a lot of confusion as well. I think at this point, it’s obvious that this market is one that you need to be very cautious about putting too much money into, and I think that although we have been bullish as of late, I think it’s only a matter of time before something happens to turn this market back around.

Pay attention to the noise coming out of Italy, could suddenly move this market. Beyond that, we have seen a significant rally based upon the idea that the United Kingdom was leaving the customs union, which in the end I don’t know how much that truly affects what’s going on. I think this is going to continue to be a very sloppy trading situation, so I would be cautious to say the least. Some type of range bound system based upon trading against exhaustion might be the best way to deal with this noisy situation.