EUR/GBP forecast October 9, 2017, Technical Analysis

The EUR/GBP pair continued to show bullish pressure on Friday, reaching towards the 0.90 level. This is an area that has a certain amount of psychological resistance obviously, but I think that a pullback is a nice buying opportunity, as it represents value in the Euro. I believe that breaking above the 0.90 level above would be a very bullish sign, continuing the longer-term uptrend that we are now starting to recover. I think that the 24-hour exponential moving average seen on the hourly chart shows that there is a strong proclivity to buy this market, but as we approach the 0.90 level, I think it’s likely that we will struggle, albeit for the short term only.
The British pound continues to fall in reaction to the struggles with the Teresa May government in London, and I believe that the negotiations between the United Kingdom and the European Union will continue to dominate headlines as well. Think of it this way: we already know that the Bank of England is likely to raise interest rates, and this pair is still working against the British pound. The longer-term trend has continued, and I think that if we can break above the 0.90 level, the market should continue to the 0.9250 level. The longer-term attitude of this market continues to push this market higher, and therefore I don’t have any interest in selling until we were to break down below the 0.88 level below. If we break down below there, the market will probably drop significantly. I don’t think that’s going to happen though, so therefore I look at the 0.88 level as the “floor” in the market. I think we have much further to go to the upside in this market, and therefore am paying quite a bit of attention to it.

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