EUR/GBP: Selling rallies preferred but caution required

The break below .8300 yesterday afternoon led to a raft of stop-loss selling but the fact that the market has bounced back to the breakdown level will be troubling some bears. With sentiment towards the GBP having undergone a major turnaround, and with bad news for the EUR probably on holiday rather than gone, selling rallies remains the preferred strategy here in my opinion. The fact that the .8300 breakdown level is still capping the market might tempt short-term sellers to try and pick a top with a stop-loss above yesterdays high.