EUR/GBP Forecast May 17, 2017, Technical Analysis

The EUR/GBP pair rocketed to the upside during the session on Tuesday, as the 0.85 level offered a bit of a springboard. As we rallied towards the 0.86 handle, we saw a little bit of selling pressure, and have pulled back a little bit. However, I believe that there is plenty of support underneath, and with that being the case it’s likely that the first signs of a bounce or support, the markets should get involved and start pushing higher. I believe that there is a massive amount of support down at the 0.85 level for short-term traders, and a supportive candle or a bounce between here and there is more than likely going to present itself that you can take advantage of.

Breakout to the upside

On the other hand, we could break out to the upside before seeing any significant candle to start going long upon. If we break above the 0.86 handle, and then the market should feel free to go to the 0.87 level over the longer term. This pair tends to be very choppy and volatile, and I don’t think that’s going to be anything out of the ordinary today or tomorrow. As we pull back, I believe it offers value in a market that is clearly favoring the EUR at the moment. It’s not until we break down below the 0.85 level that I would consider selling, and quite frankly that doesn’t look very likely after this impulsive move. Even if we did see that, the market will probably still see a significant support from time to time underneath. I believe that the simplest trade is going to be buying on the dips, and it should continue to offer opportunity over the next several sessions when we do so.
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