EUR/GBP Forecast October 12, 2017, Technical Analysis

The EUR/GBP pair rallied during the day on Wednesday, as we continue to reach towards the 0.90 level. Upon breaking the level, I think we are ready to go even higher, and that of course has me even more bullish. Longer-term, we have obviously been in an uptrend, and I believe that people will continue to be much more comfortable owning the euro than the British pound, as there is more certainty in the European Union. However, I’m not looking for a straight shot higher, but once we break above the 0.90 level, the market should continue to find plenty of bullish pressure. At that point, I would anticipate that the 0.90 level would become the “floor” in the next leg higher, as the market reaches towards the 0.92 handle.
In the meantime, if we do pull back from here, I think the market will find plenty of support underneath. Ultimately, I think that every time we pull back, the buyers and the longer-term traders will be interested in getting involved. I have no interest in shorting this pair, as the 0.89 level underneath will be massively supportive, and a breakdown below there will only find more support at the 0.88 level. Quite frankly, at this time I am looking for a buying opportunity above the barrier, so that I can continue to buy this market. It’s not until we break below the 0.88 level that I would be concerned in the pair, as the uptrend has been so reliable and steadfast. I think that ultimately, this pair is going to continue towards the 0.95 handle, and then eventually the parity level. This will be especially true if there are any signs of weakness and the British pound, British economy, or softening of hawkish rhetoric out of the Bank of England.