EUR/GBP Forecast July 14, 2017, Technical Analysis

The EUR/GBP pair broke down a bit during the day on Thursday, testing the 0.88 level. This level is starting to offer support though, so I suspect that we will probably bounce from here. This is an area that is important on longer-term charts, and I think will continue to be so. Given enough time, there will obviously be headlines coming out of both Brussels and London that can influence this market, and therefore we could get sudden moves. The volatility has been extraordinary over the last several sessions, and I think that might be the case going forward as we not only have
risk, but we also should question whether we have volume as we are approaching vacation season. When I look at the charts though, the 0.88 level below has been important on longer-term charts, and I think will continue to be.
Reaching towards 0.8850
The market looks as if it will probably bounce and reach towards the 0.8850 level, but beyond that I would be a bit cautious with this pair. I think the recent volatility dictates just how dangerous this pair could be, and therefore keeping your position size small is probably the best advice that I can give. If we do breakdown below the 0.88 handle, the market should find plenty of support down to the 0.8760 level. A breakdown below that level would be very negative, and send this market much lower. Longer-term, I think that the market will probably try to reach the 0.90 level, but it is going to be a very noisy move towards that level. Caution should be urged for traders, but once we make an impulsive move, it could be for a long-term opportunity. However, I think we need to get through the negotiations between Great Britain and the European Union before we see that happen.
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