EUR/GBP Forecast November 3, 2017, Technical Analysis

The EUR/GBP pair went sideways initially on Thursday, but then sliced through the vinyl 0.88 handle to the upside after Mark Carney from the Bank of England suggested that although they were raising interest rates during the day, quite frankly it’s going to be a very slow and gradual rise that the market can expect. Now that we’ve reentered the previous consolidation area, I think that a pullback will more than likely offer a buying opportunity as the 0.88 level should be supported. The market should continue to reach towards the 0.90 level as it is the top of the reason. I think that if we can break above the 0.90 level, the market should then go to the 0.92 level above. I think that the turnaround is a nice buying opportunity as we had recently sold off drastically.
The alternate scenario is that if we break down below the 0.8740 level, we would continue to go much lower. Ultimately though, I think that the buyers will continue to run the show, as the longer-term trend has been very bullish. A lot of pundits think that the pair is going to go to the parity level, and I think it makes sense as traders will continue to be concerned about the situation in the United Kingdom after leaving the European Union. They clearly will favor the European Union for its stability, even though I think in the long run the United Kingdom will do quite well, and I would be interested in owning the British pound once we shake a lot of the doubt out of the system. After the significant move during the Thursday session though, it looks likely that the buyers are coming back to push this market much higher.