EUR/GBP Forecast May 24, 2017, Technical Analysis

The EUR/GBP pair initially tried to rally during Tuesday, but found enough resistance above to turn things around and go falling from there. There should be a certain amount of support near the 0.86 handle though, so I think it’s likely that the buyers could come back. If we break down below the 0.8550 level, then I believe that the market will roll over for a longer-term move. Until then, I am a believer of the uptrend, even though we are having several issues with it during the day on Tuesday. The marketplace will continue to be very choppy, as this is the epicenter of all things involving the divorce of the United Kingdom from the European Union, so therefore headlines can cross the wires to make this pair even noisier. Having said all of that, we are still in an uptrend so I must believe that it will continue.
As things are right now, it’s likely that most of the driving force in either direction when it comes to this pair will be statements coming out of London and Brussels, as well as other major European cities. There seems to be a lot of political posturing ahead of the Brexit talks, which one would expect. I don’t think that at the end of the day any severe move will be lasting, as the pair does tend to be rather stagnant over long periods of time. However, we are trying to figure out where we are going over the longer term through the talks, as things will certainly change going forward, but the effect and the scope of that change is still unknown, and that makes trading them market very difficult. Smaller position sizes should be utilized to protect your account.