EUR/GBP Forecast October 30 , 2017, Technical Analysis

The EUR/GBP pair initially tried to rally during the week, but found the area near the 0.90 level to be resistive yet again. We had formed a couple of shooting stars, followed by this past week’s candle, which of course looks negative. The 0.88 level is just below, and that is an area that should be supportive. However, if we break down below the 0.8750 level, then I think the market probably goes looking towards the 0.83 level longer term. The British pound looks a bit soft, but the Euro has broken down significantly against the US dollar, triggering a head and shoulders pattern on the daily charts. Because of this, I think we may continue to see a bit of bearish pressure, and therefore I expect a breakdown below the 0.8750 level to offer a selling opportunity.
Alternately, if we were to somehow turn around and break above the 0.90 level above, that would be a very bullish sign, perhaps sending the market towards the 0.93 level above. Longer-term, we are obviously in an uptrend and that of course doesn’t change until we break down below the 0.83 handle, something that I don’t see happening in the relative near future. The volatility should continue, because quite frankly we have a lot of noise coming out of both Brussels and London when it comes to the United Kingdom leaving the European Union, and that of course will continue to be a major influence on where this market goes next. It will be noisy, but I suspect that this next weekly candle will to finally go next, so patients may be needed. If your longer-term trader, you may be looking to wait for it to print to make your next decision.