EUR/GBP Forecast November 7, 2017, Technical Analysis

The EUR/GBP pair has rolled over during the day on Monday, reaching down towards the 0.8830 level. This is the 50% Fibonacci retracement level after the surprise, it’s out of Mark Carney, suggesting that the Bank of England wasn’t going to raise interest rates anytime soon, after the small rate hikes that we got last week. I believe that the combination of the 61.8% Fibonacci retracement level underneath, and the psychologically as well as structurally important support should continue to keep the market afloat, especially near the 0.88 handle. This is an area that has attracted a lot of attention over the longer term, so I suspect that we should get a buying opportunity relatively soon.
Be aware of both economies, as the United Kingdom is facing a bit of inflation, but it does seem temporary. At the same time, we have the European Union which has recently cooled off, least in the words of Mario Draghi. That being the situation, both central banks will continue to be very soft, but traders hate uncertainty, and it’s likely that they will feel much more certain in the European Union due to the divorce proceedings that we are currently going through.
I think that we will eventually get the buying opportunity needed, and then should bounce towards the 0.90 level. This will take a significant amount of time though; this pair does tend to move rather slowly. However, the pit value was much stronger, so you do get paid for waiting. If we were to break down below the 0.8730 level, that would change everything, and I think we would go down to the 0.86 level, which is significant structural support based upon longer-term charts. While I am bullish, I know headlines can crossed the wires from either London or Brussels at any time to throw this market into a tizzy fit.