EUR/GBP Price Forecast December 7, 2017, Technical Analysis

The EUR/GBP pair continues to be very noisy, breaking out to the upside during the day, only to turn around and test support again. · FX Empire

Christopher Lewis

Updated Wed, Dec 6, 2017, 10:17 PM

The EUR/GBP pair broke above the 0.88 handle, and then rallied significantly during the trading session on Wednesday. We found resistance again at the 0.8850 level, so pulled back towards the 0.88 level underneath. That’s an area that has been important in the past, and now that we are forming a hammer on the hourly chart, I suspect that we could continue to see “higher highs” as we grind away to the upside. There of course are a lot of headlines coming out the can move the market involving the breakaway of the United Kingdom from the European Union, so keep that in mind as well. Longer-term, I think that we will go looking towards the 0.90 level, but that’s not to say that it’s going to be easy to take this trade, as it will be very choppy and noisy.

Ultimately, if we were to break down below the 0.8775 handle, we could drop down towards the 0.86 level, which has been very important longer-term as well. We are in a longer-term uptrend, and I believe the traders will continue to favor the European Union over the United Kingdom due to the relative stability in the EU, so I think that the market will be noisy, but still favor the longer-term move that we have seen over the last several months. If we were to break down to a fresh, new low, the 0.86 level is even more supportive. A break above the 0.90 level should send the market to the 0.93 handle, which of course was the most recent highs in the pair, and given enough time I think most traders are wanting to test that level.