The euro pound is becoming increasingly difficult to trade at the moment, and whilst the general trend is bearish, as expected, the move downwards is very sluggish, with the possibility that the pair are now beginning to consolidate in the 0.8700 region, with a possible triangle pattern. Whilst yesterday closed down on a wide spread down bar following the indecision of a doji the day before, today prices have edged higher again, so the direction is very unclear at present. The moving averages are all pointing lower and should we see a break below 0.8650, then this could be the signal for a move lower to the 0.8400 region. We now have resistance forming above in the 0.9000 region, which will provide protection for us in any short positions in the future. My view on the pair remains unchanged as I believe the euro is over bought against the UK pound and we should see prices fall in due course, but as always we have to wait for the signal to appear in the chart. I have covered the $undamental news the UK pound on the pounds to dollars site, and for the euro on the euro to dollar site.I would suggest that you take a wait and see approach with this pair for the time being – sorry!

The short and medium term outlook is sideways, the long term is bearish.