EUR/GBP Forecast October 23, 2017, Technical Analysis

The EUR/GBP pair fell apart during the day on Friday, slicing through the 0.90 level to fall to the 0.8930 handle. I think there is plenty of support just below though, so it’s likely that we could get a bit of a bounce. I think short-term traders will continue to go back and forth, but I would also point out that the weekly candle is a bit of a shooting star. The shooting star from the previous week also suggests that we are going to continue to see plenty of issues coming out of both Brussels and London, as this pair is the epicenter of noise when it comes to the negotiations of the United Kingdom leaving the European Union. Ultimately, I think that the 0.89 level being broken to the downside should send this market to the 0.88 handle underneath, which has been even more supportive.
If we were to break above the 0.10 level over there, the market could continue to go higher, perhaps reaching towards the 0.92 level. Above there, the market could then go to the 0.95 level, and then parity after that. I believe the market should continue to be very noisy, so I believe that if we can get involved in the market, starting out with small positions should continue to be the way going forward, and it’s likely that the addition of smaller positions would be the best way as it could give you a bit of a higher gear when it comes to profitability. Ultimately, I think that it’s probably not necessarily the worst idea to stairway. Short-term trading is probably about as good as this gives, and therefore it will continue to be very difficult market. While we are in a longer-term uptrend, it looks as if the last couple of weeks have changed attitudes again.