EUR/GBP Forecast July 20, 2017, Technical Analysis

The EUR/GBP pair went sideways initially during the day on Wednesday, and then fell slightly during the day. We continue to see a lot of choppiness, as the market has been banging around the 0.8850 level. I think that there is massive support underneath that the 0.88 handle, so the market should continue to be very choppy, and given enough time I think we will probably find buyers in this market. The 0.88 level underneath should continue to be a “floor” in the market from the short-term markets, and then the market could probably go to the 0.89 handle. Longer-term, I believe that were going to go looking for the 0.90 level, which of course has a massive amount of psychological importance. The market pulling back should be opportunities to go long, unless of course we break down below the 0.88 handle, which would be very negative.
I believe the volatility is here to stay in this pair, especially considering that we have negotiations between the United Kingdom and the European Union when it comes to the UK leaving the EU. I think that we will continue to see a lot of headline risk when it comes to this market, and therefore it’s probably a market that will suddenly move for or against you. Because of that, I am looking for smaller positions, because I know that the market could move against me rather rapidly, the last thing you want is to be shaken out of a position by a knee-jerk reaction to something that a random politician in Brussels or London says. Looking at the longer-term charts, the uptrend is still very much intact, and of course there is still quite a bit of bullish pressure underneath the current levels we find ourselves at.