EUR/GBP Forecast May 9, 2017, Technical Analysis

The EUR/GBP pair had a negative session on Monday, as the Euro sold off after the French election. This might have been a “buy the rumor, sell the fact” type of situation, as all markets against the EUR seemed to favor the other currency. The more important part of this chart is the 0.85 level, which is an area that has caused quite a bit of resistance. I believe that it’s not until we break above there that it’s going to be easy to buy this pair. I also believe that the British pound longer-term looks very healthy, and that we are going to take advantage of an uptrend against the US dollar and the changing of the overall attitude of the British pound markets. Ultimately, the market looks as if it favors the British pound over several other currencies, not the least of which would of course be the EUR.
Continued volatility
The continued volatility that we see in this market should continue, as it is the epicenter of where currency traders will express their opinions about Great Britain leaving the European Union. If there will be a lot of headlines crossing the wires, is can be very difficult for this market to be traded for any real length of time and less you can deal with significant choppiness. It should be expected, but keep in mind that the PIP value in this market is much larger than most other currency pairs, so you don’t necessarily need to see as large of a move in this pair as you would and other markets. Ultimately, this market I believe still has plenty of bearish pressure, and with that I remain a seller of short-term rallies that show signs of exhaustion on short-term charts.