Euro rallies against Sterling again on Monday

The EUR/GBP pair has broken out to the upside during the trading session on Monday, reaching towards the 0.8835 level again, and yet again we have seen a bit of resistance. If we can break above that level, it’s likely that the move could pick up a bit of momentum. At that point, I think that the 0.89 level makes a lot of sense based upon previous structure. Beyond that, we have gotten a bit of good news coming out of the European Union, as the Italians have reiterated their desire to be involved in the Euro.

If we get more trouble out of Italy though, it’s possible that we could break down to the 0.8750 level. That area has been supportive in the past, and I think that it might take a certain amount of negativity build up to break down below there in continue to go even lower. I think that there is a lot of volatility in this marketplace going forward, and it makes sense that we should continue to see that be the case as the negotiations to leave the European Union continue. It does look like we have an upward proclivity in this pair though, so eventually the market could go as high as the 0.90 level.

If we break down below the 0.8750 level, that would be a very negative sign and it should send this market down to the 0.87 handle. That would be something of the reaction due to something coming out of Italy would be my guess.