EUR/GBP Forecast June 13, 2017, Technical Analysis

The EUR/GBP pair initially went sideways on Monday but then broke out above the 0.88 handle as Europeans continue to sell off the British pound. This was a very significant move, and it now looks as if we are getting ready to pull back. However, that pullbacks should continue to attract buyers, and I believe that the 0.88 level underneath will offer support. If we did breakdown below there, there is a gap that needs to be filled, which could send this market as low as 0.8650 below. However, I think that overall the markets continue to see buying opportunities on pullbacks that show signs of support. I think that the market will eventually go looking for the 0.90 level above, which of course is a large, round, psychologically significant number.
British pound weakness
The British pound in general has been very weak, so I believe that is driving this pair more than anything else. While the EUR has been relatively stable, the impulsivity in this pair certainly has more to do with the British pound than anything else. While we continue to see uncertainty coming out of London, it makes quite a bit of sense that the pair goes much higher. I believe the 0.90 level will cause a significant amount of resistance, but a break above there then will open the door to parity over the longer term. I don’t believe in selling this pair, as there is far too many things to think that a significant selloff is going to be an easy thing to accomplish.
If we do breakdown below the bottom of the gap, then it would show a significant trend change, and at that point I would become a massive seller of this pair as it would be such a negative sign.