EUR/GBP Forecast May 8, 2017, Technical Analysis

The EUR/GBP pair had a wild ride during the day on Friday, as we initially tried to pop above the 0.85 handle, but turned around to fall apart. After the jobs number, we had a lot of volatility and bounced slightly, but it looks very likely to me that we will follow the uptrend in channel that we have seen over the last 5 or 6 days. This is a market that will probably grind higher more than anything else, but I recognize that the 0.85 level will offer a bit of psychological resistance. Having said that, this is a pair that has more value per pip, and therefore we don’t need as big of a move. 20 pips in this pair is more like 38 in one of the majors. So, with that, if you are patient and can deal with a slow-moving trade, perhaps buying this pair, and hanging on to the trade for a couple of days might work out nicely for you.

The other case…

Obviously, we can fall from here as well and I think if the 0.8450 level is broken to the downside, and then we may have a move towards the 0.84 handle after that. Below there, we would fill the gap which should send this market to the 0.8375 handle underneath. Ultimately, the market does seem to favor the Euro, but the British pound looks relatively strong as well. Ultimately, I think that we will try to reach the 0.8535 level above, which has actively offered resistance recently. Nonetheless, expect choppiness and tight trading conditions over the next several sessions regardless of which direction we head. Keep in mind that this pair takes its time, so if you find yourself getting involved, be patient.