EUR/GBP Price Forecast November 6, 2017, Technical Analysis

The EUR/GBP pair fell a bit during the day on Friday, as the British pound picked up a little bit of strength, and the Euro has been rolling over. The EUR/USD pair broke down below the 1.17 level, and it looks likely to go down to the 1.13 level. If that’s the case, we should see this market have a similar move, perhaps reaching down to the 0.88 handle. Ultimately, this market breaks down from here, it makes sense that we will test the massive support at the 0.88 level. However, I think that area will offer support, because quite frankly the British pound has been pummeled due to the comments coming out of the Bank of England. Mark Carney suggested that interest rate hikes are not going to be automatic, and not necessarily coming very rapidly. Because of this, the British pound is starting to struggle, but I think at the end of the day we need to pull back to find value in this pair, as we got ahead of ourselves.
While short-term traders might be willing to sell this pair, I much more interested in buying the dips that find support just above the 0.88 level, because it coincides with the longer-term trend, and the longer-term consolidation between the 0.88 level and the 0.90 level. I believe that’s what we are about see, so a certain amount of patience will probably be needed, but if you are patient enough, it should pay off quite handsomely once we get the signal. If we were to break down below the 0.8750 level, the market could roll over rather drastically, perhaps reaching down to the 0.86 level after that. Either way, keep your position size down a bit, because the pair is going to be very volatile.