EUR/GBP Forecast May 31, 2017, Technical Analysis

The EUR/GBP pair initially dipped lower at the open on Tuesday, but bounced enough to turn things around. If we can break above the top of the range for the day, we will then go towards the downtrend line that has kept this market somewhat under wraps as of late. The recent pullback has been rather strong, but if we can break above the downtrend line, and the 0.8750 level, the market should then go looking towards the 0.88 handle after that. A break above there allows the market to then go to the 0.90 level above. Ultimately, if the markets continue to grind higher, this would more than likely coincide with a moved to the 1.15 level in the EUR/USD pair. There are a lot of concerns when it comes to Great Britain obviously, and a lot of uncertainty continues to weigh upon the currency.
The 0.8650 level underneath
I believe that the 0.8650 level underneath should continue to be supportive, as it had been resistive in the past. I believe that buyers will continue to flock to this market, as long as we can stay above there. On the other hand, if we break down below that level, the market would more than likely breakdown from there. They move below there sends this market towards the 0.86 level after that. Either way, I think the one thing that you can count on in this market is probably going to be a significant amount of volatility as it is the centerpiece and main battlefield of the ongoing divorce between the European Union and the United Kingdom. With this, I think headlines will continue to be a problem, and therefore it will stay very choppy until the future direction of the Brexit is a bit clearer.
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