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

The Euro initially rallied against the British pound during the trading session on Tuesday, reaching as high as 0.8860, and then pulling back towards the 0.88 level. Now that we are starting to see support again at the 0.88 handle, I think we will eventually rally, but I recognize it is going to be very difficult and noisy in the meantime. Once we do get the rally, I think we will eventually go looking towards the 0.90 level above, which is the top of the recent consolidation, and has been an area of significant selling pressure. The market of course is going to be very noisy as headlines come out of both London and Brussels involving the negotiations for the United Kingdom leaving the European Union, and during the session we had a lack of agreement coming out of those negotiations, but in the end Teresa May also suggested that perhaps we were close. In other words, this is a market that will continue to be very noisy, and although difficult to navigate, I recognize that we look likely to be forming a higher low, which is a very bullish sign, following a higher high. It’s going to be very noisy, but I believe that the buyers will eventually take over.
If we were to move below the low during the session on Monday, that should send this market looking for the 0.86 level underneath, which has been supportive in the past and has been historically important in both directions, meaning that there should be a significant amount of order flow just waiting to happen, thereby making an attractive place for both sides of the market to be interested.