As things stand right now, I do think we’re in the process of trying to build a little bit of a base for the next bounce, but I will watch that 0.85 level very closely.

• The Euro initially fell against the British pound, but you can see we have turned around to form a bit of a hammer early in the day.
• The 0.85 level underneath continues to be an area that a lot of people will be paying attention to because it is a large round figure and an area that historically has been very important.

So with all that being said, I think it comes together quite nicely for a potential buying opportunity that we can take advantage of. The 0.85 level is an area that a lot of people continue to see buyers jumping into the market to take advantage of this floor. But if we were to break down below the 0.85 level, then it opens up a move down to the 0.84 level.

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When you zoom way out though, it’s obvious that this is a market that has seen a lot of interest in this area. So I think it’s probably worth a trade. Whether or not it sticks, we have to remain vigilant to that. But I think given enough time, we could go as high as 0.8750. And that of course is an area where we’ve seen a lot of interest previously either way.

Even if you don’t trade this particular EUR/GBP pair, it’s a very important one to pay attention to because it gives you an idea of what to do with the Euro against the dollar or the pound against the dollar. Whichever one’s doing better, if you’re shorting the dollar against one of these currencies, then you want to own that one. It’s a process called triangulation. On the other hand, if one of these currencies is doing particularly bad against the other one and they’re both doing poorly against the US dollar, well, you know which pair to short the Pound/dollar or Euro/dollar or whatever. So with all that being said, this is a very important chart. As things stand right now, I do think we’re in the process of trying to build a little bit of a base for the next bounce, but I will watch that 0.85 level very closely.

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