EUR/GBP Forecast May 11, 2017, Technical Analysis

The EUR/GBP pair had a volatile session on Wednesday, testing the 0.84 level for support. It seems as if there is a lot of noise just below that handle, and of course more than likely will continue to consolidate. The consolidation area should continue to attract a lot of attention, but if we can make a fresh, new low, this could become a longer-term trade just waiting to happen. That of course would need to coincide with either Euro weakness in general, or Pound strength. With today being a Bank of England interest rate decision and more importantly the accompanying minutes of the meeting. If the British pound can start to find more hawkish pressure, that will only accelerate the downward move in this market. However, there are a lot of levels above that could cause significant troubles.

Short-term rally?

We could get a bit of a short-term rally, but I think that will only end of being a selling opportunity as well. I think that the market will continue to struggle in general, and I believe that we will make a serious attempt to break down. However, I am willing to take the other side of the trade if we can break above the 0.8450 level. Right now, I think there are far too many moving pieces to place a trade, at least until after the market digests the news from London today. With this, I do favor the downside but I also recognize that a bit of a surprise could come. Today should be very important for the future of this pair, so you would not be shunned for stepping on the sidelines and letting the market dictate where it is going next before placing any real money to work.
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