EUR/GBP Forecast September 25, 2017, Technical Analysis

The EUR/GBP pair had a very choppy session on Friday as we continue to bang around just above the 0.88 level. This is a level that’s crucial, because it is significant support on longer-term charts. This was an area that was massively resistive for several months going back a couple of years, so I think that we will continue to see a lot of noise in this area. This will be especially true as the 2 economies discuss the breakup, and therefore headlines could move the markets in both directions. Technically speaking, I would anticipate the buyers are coming back into the market, but right now the action is less than impressive. A breakdown below the 0.8750 level would be very negative, and could send this market much lower. I believe that the market breaking above the 0.89 handle would be very bullish, and should send this market looking towards the 0.90 level next.
Remember, this pair has more value per tick than other currency pairs, so it won’t take as big of a move to make your money. I believe that the market will continue to see volatility, so therefore short-term range mounting strategies might be the best way to deal with this market. If we do break out in either direction, I am than willing to follow. If we were to break down, when I look at longer-term charts they suggest that we could go as low as the 0.83 level. If that happens, then I think the floodgates open. Currently, the uptrend certainly looks threatened but it is still intact if we can stay in this general vicinity. A break above the 0.90 level would only confirm that but obviously would take quite a bit of effort to get to.