EUR/GBP Forecast September 27, 2017, Technical Analysis

The EUR/GBP pair fell to make a fresh, new loan during the session on Tuesday, breaking well below the 0.88 handle. This is a very negative sign, and I believe we will continue to see bearish pressure in this market. Ultimately, the market could find itself dropping down to the 0.86 handle next, which I think offers more than enough of an incentive to start shorting. I think that it’s not a market that can be bought anytime soon, as the EUR/GBP pair has broken a significant area. I believe that it’s not until we break above the 0.8880 level that I would think we would have the opportunity to go long. I think in the short term, the concerns about the German election coming out closer than anticipated should continue to weigh upon the common currency. Ultimately, I think that the market should find buyers underneath, but it is going to take some time to get to that level. In the short term, I think that selling rallies is going to be the way going forward.
I anticipate that the 0.86 level underneath will be support, just as the 0.85 level will as well. Alternately, if we break out to the upside, the market will go looking for the 0.90 level, which will be the next major resistance barrier. In the meantime, I anticipate that the markets will be very volatile, but certainly have a negative slant to them as the British pound has been stronger than the EUR anyway, and of course we have a significant amount of negativity jumping into the common currency sense that election. I think that smaller positions may be needed though, because we have so much in the way of volatility. Ultimately, I think we go lower for the next couple of weeks.