EUR/GBP Forecast October 5, 2017, Technical Analysis

The EUR/GBP pair had a volatile session on Wednesday, as we ran into a lot of resistance at the 0.8880 level. The 0.8850 level is currently offering support though, so I think that the market is going to continue to chop around overall. The longer-term uptrend it still very much intact, although we had recently seen a massive selloff. I believe that the market is trying to build up the necessary momentum to continue the uptrend, and therefore I like buying dips. I believe that the 0.88 level is going to offer a bit of a “floor” in the market, which should continue to be very stringent. Because of this, I believe that adding incrementally might be the best way to build up a large position that we can take advantage of. I believe that the market will eventually reach towards the 0.90 level above, which of course is a long-term support and resistance level.
Stair stepping
I believe that the market will continue stair stepping, and therefore I think that it’s only a matter of time before we surged higher. Ultimately, I think that adding little bits and pieces gives you the ability to build a much larger position than you would have normally, and a little bit of patience can go a long way in a market that has seen such volatility. A break above the 0.90 level sends this market looking for the 0.95 level above, and then possibly parity. I have no interest in shorting until we can break below the 0.88 handle, something that I don’t anticipate happening in the short term. With this in mind, I remain bullish but I also recognize that this is more of a slow and methodical grind to the upside than anything else.

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