EUR/GBP Forecast July 10, 2017, Technical Analysis

The EUR/GBP pair went sideways initially on Friday but then found enough support at the 0.88 level to turn things around and go grinding higher. It looks as if we are trying to break out to the upside but we have not cleared the previous high from last week, so I think that the market may possibly pullback or even consolidate in the short term to try to pick up more momentum. Once we do breakout to a fresh, new high, then I feel that the market is probably ready to go to the 0.90 level, which would be very important as it is a large, round, psychologically significant number and has already proven itself to be resistive in the past. Keep in mind that this market will continue to get a lot of headlines coming out of both London and Brussels that could move this pair, so careful trading is the only trading you can do.
Buying dips
I believe that in this pair you should be buying dips, as the 0.88 level should offer a bit of a “floor” in the market. Ultimately, the market should continue to be one that offers value on those dips, and I think most traders look at it that way. The EUR/USD pair has been grinding to the upside, and if it can break above the 1.15 level, that should be very explosive for this pair, sending us above the 0.90 level and perhaps even looking for parity over the longer term. In the meantime, I think that most of the action in this market will be due to headlines more than anything else, as it seems like most traders are ignoring most economic indicators and simply paying attention to the political situation on both sides of the English Channel.
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