Finding a temporary equilibrium
Eurgbp , after the mainly Euro strength led rise from May to August , Brexit galore , then this month’s subsequent drop from the 0.93 level to below 0.88( move largely accompanied short eurgbp) partially driven by BOE rate and/or tapering expectations,may have found a ,wobbly but albeit , equilibrium for now . The BOE has put itself level again compared to ECB in broad lines , acknowledging the helicopters are running out of fuel .Brexit talks will of course create noise with every official comment spitting out some venom . But as long as talks are ongoing ,Uk negotiating bilateral deals with other countries not giving the EU the goal upper hand , I reckon EURGBP could settle in a range for now, the noise commanding it to be a bit wider than I would ideally like. There’s a congestion area under 0.88 and a similar one above 0.90 , within the 0.8735 (61.8%) and 0.9089 (23.6%) Fibo’s of the afore mentioned move higher .These boundaries broken will act as my stop and reverse. Inside I started to build up a small long , will add down to 0.8770 and will start to offload the position from 0.8950 and get short towards 0.9050. Updates will follow as we go .
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