EUR/GBP Price Forecast December 13, 2017, Technical Analysis

The EUR/GBP pair initially went sideways on Tuesday, and then went back and forth in a violent move that brought the market back down to the 0.88 handle. This is an area that has been supportive in the past, so it makes sense that we should continue to see buyers in this general vicinity. I think that the recent repudiation of the downward pressure should eventually have enough confidence in her the market to the upside. If we can break above the 0.8850 level, the market should then go looking towards the vital 0.90 level above. I think that given enough time we will get to that level, but if we were to break down to a fresh, new low, it’s likely that we will break down to the 0.86 handle, which has been supportive in the past.
With the massive amount of headline risk that is out there, expect violent moves from time to time in this pair, as the entire break away from the European Union is still measured. I think that the next question will be whether the ECB can taper significantly from the QE program, and if it does, that could send this market much higher. Inflation is rising in the United Kingdom ironically, so the British pound does have buyers out there. However, the longer-term move continues to look somewhat bullish and what I think will be one of the choppier markets over the next 12 months. Because of this, I think small positions are necessary, but I do favor the upside in general as the market has continued to find buyers over the longer term.