EUR/GBP Forecast June 22, 2017, Technical Analysis

The EUR/GBP pair initially tried to rally but then broke down significantly during the day as a member of the Bank of England suggested that perhaps interest rate hikes are coming sooner than the market realizes. That of course is positive for the British pound, and that means that the pair had to fall. However, we have rallied a bit later in the day and I think it’s only a matter of time before we break above the 0.88 handle, thereby following the longer-term move. I believe that the market spending a couple of hours above that level is a decent signal to start going long, and perhaps reaching towards the 0.8850 level. To break above that sends this market even higher, perhaps reaching towards the 0.90 level longer-term, which is a massive high on the longer-term charts.
Supported below
I believe that this market is supported below, regardless of what happens. I also believe that the longer-term move could be towards the parity level, unless of course the so-called “Brexit” talks go against the European Union. Alternately, this market will remain volatile as headlines from both London and Brussels will continue to put massive amounts of volatility in the market. I believe that eventually we will favor the EUR, but there is always the possibility that things work the other way. Because of this, be careful and make sure to place prudent stop loss orders. I believe that longer-term though, the uptrend is still viable, at least until we get some type of finalize deal as to whether or not the United Kingdom gets its way, or if the deal becomes punitive. Longer-term, I believe that the United Kingdom will come out of the situation relatively unscathed, as there is a WTO agreement in place as a backup. However, the market is not focusing on that yet.