EUR/GBP Forecast November 9, 2017, Technical Analysis

The EUR/GBP pair rallied significantly during the trading session on Tuesday, bouncing from the 0.88 handle. This is an area that has been very important several times on the longer-term charts, and it is also the 61.8% Fibonacci retracement level from the immediate surge that happened after Mark Carney suggested that the United Kingdom wouldn’t be raising interest rates again anytime soon. This was a bit of a surprise for the market, but you can see that we gave back most of the gains. We found support exactly where we should have though, at the 0.88 level. That’s an area that I have used several times in the past to buy and sell from, and it looks like it will continue to hold rather significantly.
I believe that the headlines will continue to push this market back around, as we don’t know what will come out of the mouths of people in both London and Brussels. Because of this, it’s likely that the markets will be very difficult to deal with. I believe in the longer-term uptrend though, because there is much more certainty in the European Union than there is in the United Kingdom in the near future. I believe the traders will continue to bet on an area that they know more about, as we are not sure exactly how the United Kingdom will look after the markets split. I believe that the next target is the 0.90 level, which has been significant resistance in the past. If we can break above there, then the next target is the highs at the 0.93 level. If we were to break down below the 0.8750 level, then I think the market will probably continue to the downside, but right now my thesis is for a higher price level.