Euro rallies against British pound but fails at major round number for the week

The Euro rallied significantly during the trading week, breaking above the 0.88 level. The 0.88 level has been important more than once, so it’s not a huge surprise that we would see a bit of a pushback in that area. I think that if we can break above the top of the candle, the market could go to the 0.8950 level after that. This is a market that continues to be very noisy and of course jittery due to the ensuing negotiations between the European Union and the United Kingdom. Obviously, headlines will move this market, so be aware of that.

Looking at this chart, I think that if we do break down, the 0.86 level would be massively supportive. That area should continue to be difficult to break through, and if we did I think it would involve some type of major issue in the European Union, perhaps something coming out of Italy. If the situation in Italy deteriorates, it’s possible that we may see the Euro fall in general. However, if things calm down in Italy, we could see this market rally again. I think the best way to trade this market is to simply go back and forth and use some type of range bound short-term strategy. I don’t think it’s good to be very easy to buy this market or even sell it from a longer-term standpoint. This will continue to be a very difficult and choppy market overall.