EUR/GBP Forecast May 4, 2017, Technical Analysis

The EUR/GBP pair had a choppy and volatile session during the day on Tuesday, bouncing around the 0.8450 level. Currently, I think the market is probably a bit difficult to trade, and I believe that the 0.8480 level above is resistive, while the 0.8425 level underneath is supportive. The market will probably be more of a range bound proposition over the next several sessions, and therefore am not overly enthused to be involved. Remember, this is the “Ground Zero” battleground of the United Kingdom leaving the European Union. As headlines cross the wires from time to time, we will continue to see volatility as traders tend to be very skittish about these things.
Range bound trading systems only
I believe that range bound trading systems are about the only thing you can use in this area, because quite frankly it is a market that seems to be lost currently, and of course has a lot of moving pieces. It is very likely that there will be a lot of danger when it comes to trading this market, and therefore one will have to be extraordinarily careful. Because of this, the best way to trade this market will probably be binary options if you have that ability. Nonetheless, I think that waiting for a breakout above the resistance or a breakdown below the support could be a viable strategy, as there will be easier markets to trade currently. Quite frankly, I prefer to trade the Euro and the Pound against other currencies and not against each other as the headline risks are simply far too difficult. The markets sometimes need to consolidate and take in all the news, and I think that’s what we’re seeing here, and may see for the next several sessions.