EUR/GBP Price Forecast December 11, 2017, Technical Analysis

The EUR/GBP pair initially drifted a bit lower during the day on Friday, but has turned around and reached towards the 0.88 handle. Because of this, I believe that we are seen a significant amount of support in a market that needed to see it at this area. A break above the 0.8850 level should send this market towards the 0.90 level, which would be a simple return to the previous consolidation area that we have seen for quite some time. Because of this, and the fact that the negotiation seem to be chugging along, I think that the market is ready to find itself in this area again, meaning that it’s likely we will see buying pressure. I don’t have any interest in shorting this market, as the recent pullback and bounce has been a repudiation of that move.
For what it’s worth, the weekly candle is going to look very much like a hammer, and that of course is a bullish sign. However, that 0.90 level has been a very tough nut to crack, and this time year does not necessarily bode itself for massive breakouts. However, if we were to break above the 0.90 level, the market should then go looking towards the 0.93 handle after that. A breakdown below the lows of the trading session on Friday would be a very negative sign though, and perhaps change things drastically. All things being equal, my base case scenario is that the buyers finally take the initiative again, as we have seen so much in the way of resiliency. Large positions are not advised until we can clear the 0.8850 level.