EUR/GBP Forecast May 3, 2017, Technical Analysis

The EUR/GBP pair fell significantly during the Tuesday session, testing the 0.8420 level. We did find a little bit of support though, so we could bounce from here. Remember, we have a gap from several days ago that should continue to offer support.
Because of this, it’s likely that we may go looking for the 0.85 level again but it’s going to take a certain amount of momentum. I expect this market to be very choppy, after all it is essentially the “battleground” for currency traders when it comes to all things “Brexit” related. There are a lot of moving pieces and of course headlines out there that could cause issues, but I think more than likely we will see a bit of the range in the next couple of sessions. I believe that there should be significant support near the 0.8350 level underneath, which was where the gap started. If we broke down below there, then the bearish pressure would pick up drastically. Once we get below that level, then we must start looking at a longer-term downtrend. However, I don’t think that’s going to happen anytime soon. I still believe that the 0.85 level above is the target and the short-term, but know the Tuesday session has not been too kind to the Euro in general. A break above the 0.85 level would be very bullish and send this market looking for the 0.8525 level above there. No matter what happens, I think you can see that this market will be very choppy, and therefore being very careful with the stops and of course quick to move to breakeven is necessary and prudent when it comes to this type of volatility. The market won’t necessarily be the easiest to trade over the next several sessions.