EUR/GBP Forecast July 6, 2017, Technical Analysis

The EUR/GBP pair rallied initially during the session on Wednesday but found the 0.88 level to be resistive enough to keep the market within the consolidation area that we have been trading and over the last several sessions. As for myself, this makes quite a bit of sense as the negotiations between the United Kingdom and the European Union should continue to cause headlines and of course “headline risk.” Because of this, the market will more than likely be very difficult to trade, and I believe that we are going to go back and forth in a very tight range. If we can close above the 0.88 level on a daily candle suggests that we are going to go higher, perhaps reaching towards the 0.8850 level. Alternately, if we break down below the 0.750 level, the market should then go down to the 0.87 handle after that.
I believe that this market continues to go sideways until we get some type of clarity out of the negotiations, which of course is a long way from coming. That being the case, I think that short-term back and forth trading is probably about as good as it gets, and therefore range bound trading system should be deployed. Short-term trades and smaller positions will probably be the best way to deal with this market. After all, if it goes against you it can’t hurt you as much, and there is a certain amount of headline risk when it comes to politicians speaking over the wires.