By FXEmpire.com
The EUR/GBP pair fell again on the Thursday session as the Euro continues to show weakness against the Pound. The Pound in general is stronger overall, and as a result it shouldn’t be such a surprise that this pair is weak overall. The recent moves have all been downward, and as a result we only sell this pair right now.
Adding to the mix is the S&P downgrade of Spain by two notches on Thursday, and this should only add to the bearishness to the Euro currency overall. The United Kingdom just fell into a recession, but only the garden variety, not the potential debt bomb that Europe now is. Because of this, the Pound will certainly be thought of as a safer currency than the Euro at the moment. Plus, the swap is positive when you are short of this pair.
The 0.81 level continues to be the support area, and we think that once we get a daily close below that mark, we can add to our already short position. The pair looks as if it wants to go down to the 0.80 level before it is all said and done, and this is a natural level in the pair over time as it is revisited time and time again. We think this is the natural course of things, to fall lower and to that level, but it is going to take time.
The move lower will take patience as the pair typically doesn’t move as quick as others, but the pip value is larger, so it doesn’t need to in order to be profitable. The shooting star for the Wednesday session suggested that the 0.8225 level is now significant resistance in this pair, and we think that as long as we stay below that level, it is likely that we will break down before too long. The breaking below of the 0.81 level has us selling again, and holding until we see 0.80 going forward. The buying of this pair simply isn’t possible, as the Euro is far too dangerous at the moment.
Originally posted here
