The EUR/GBP pair initially went sideways on Thursday but then broke out towards the 0.8930 level. We pulled back a bit during the day, showing signs of the market trying to rebuild its bullish pressure. I think that eventually we could go higher, perhaps reaching towards the 0.90 level. That of course is an area that’s been very noisy and important over the last several months, and I think the given enough time if we can break above there, the market should then go to the 0.92 level.
Pullbacks of this point should continue to see plenty of support, especially near the 0.8875 level. This is the beginning of massive support down to the 0.88 handle underneath, and I think that the buyers will return based upon value on these dips. I like buying these dips, and I also recognize that the market is very choppy, so I would be very cautious and methodical about adding to this position. I do wish to add to that position though, because this has been a longer-term move to the upside that has been reasonably reliable. I think that given enough time, the market should find plenty of buyers, because traders despise the idea of uncertainty, and of course there is a lot of uncertainty when it comes to the United Kingdom. Because of this, I think that we will continue to see a natural proclivity for money to flow into the market and start buying, although I think that there are a lot of questions when it comes to both economies. Remember, Germany is the main driver of European growth, so pay attention to that as well. If Germany does well, then this pair does well. If we break down below the 0.88 level, we probably go looking for the 0.86 level, although I don’t expect to see that.
EUR/GBP Video 06.10.17
This article was originally posted on FX Empire