EUR/GBP Forecast June 29, 2017, Technical Analysis

The EUR/GBP pair broke down ferociously during the day on Wednesday, slicing through the 0.88 handle. By doing so, it shows us how horrible this market might be too sudden risk, as Bank of England president Mark Carney suggested that perhaps the United Kingdom would have to raise interest rates if there was a boom in the global economy. This is basic central banking 101, but apparently the markets didn’t know this. Now that we have broken down below the 0.8 handle, we have turned around a bounce above it. I think that perhaps the market may be gaining some normalcy here, so I think that if we can break above the 0.8820 level, the market will continue to go towards the 0.8875 level. A break above there sends this market towards the 0.90 level given enough time.
The EUR/USD market
The EUR/USD market looks very bullish, after the flash crash selloff during the day. That should continue to help this market longer term, so I believe that the buyers are going to return. Short-term pullbacks that show signs of support on dips could be buying opportunities, but keep in mind that there is a lot of noise when it comes to the British leaving the European Union. There is a significant amount of volatility in this market, and I think that will continue to be the case. Alternately, if we break down below the bottom of the range for the day, the market should continue to go lower. This market will be susceptible to sudden bursts of volatility due to comments coming out of the marketplace, so be aware of that. Because of this, small positions probably are the best way to go and the short-term, adding if the trade goes in your direction.
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