EUR/GBP Forecast June 14, 2017, Technical Analysis

The EUR/GBP pair fell during the session on Tuesday, collecting all the gains back from the massive move higher during the previous session. We should now see a bit of support just below, especially near the 0.8750 level, and I think at that point there will be people willing to jump in and take advantage of the previous break out. The market of course is going to favor the EUR as there is a lot of uncertainty coming out of Great Britain currently, after the election has thrown a lot of things into down. I believe that longer-term this market will go looking for the 0.90 level above which is a next psychologically significant level. If we can break above there, we could be talking about parity, but that’s obviously not to happen anytime soon.
Buying on the dips
I believe the buying on the dips is probably the best way to trade this market, as it should continue to offer value from time to time. I recognize that this pair does tend to be very choppy, and it is the center of all things volatile when it comes to the United Kingdom leaving the European Union. There is a significant amount of headline risk to this currency pair, but given enough time I believe that the buyers will continue to push much higher. I believe there is a floor at the 0.8650 level. If we were to break down below there that would be a very negative sign. Until then, I don’t have any interest in shorting but I recognize that this pair is going to be a difficult one to be involved in unless of course you can trade small positions in think more long-term over the next several months.