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EUR/GBP forecast for the week of October 9, 2017, Technical Analysis

Christopher Lewis
Updated

The EUR/GBP pair rallied significantly during the week, slamming into the 0.90 level. This is an area that has been resistance in the past, and it’s not a surprise that we found a little bit on Friday. However, I think it’s only a matter of time before we break above there, and reach towards the 0.93 level again. The 0.88 level underneath showing support is a huge surprise, because quite frankly the market has been reactive in that area. The British pound continues to have negativity thrust upon it due to the lack of the Theresa May government to pull it together for the negotiations with the European Union. Given enough time, I think that we not only reach the highs, but probably go towards the 0.95 level.

Buying on pullbacks is probably the best way to trade this market, and I think that the volatility will remain reasonably high, but given enough time we should continue to grind our way to the upside, and therefore I’m looking for supportive candles and breakouts to take advantage of as the market has so much in the way of bullish pressure underneath it. The markets will eventually go looking towards parity based upon the longer-term outlook, and I think that many analysts out there have parity as a longer-term target. Ultimately, I think that it makes sense as there will be a lot of concerns with the economy and the United Kingdom, as we are entering the unknown and markets essentially hate the unknown. Even with the Bank of England looking likely to raise rates relatively soon, the uncertainty as to where the United Kingdom goes next is probably going to remain a bigger influence in this market over the next several weeks.

EUR/GBP Video 09.10.17

This article was originally posted on FX Empire

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