EUR/GBP forecast for the week of July 31, 2017, Technical Analysis

The EUR/GBP pair initially fell during the week but found enough support near the 0.89 level to turn around and form a bullish candle. The hammer of course is a very bullish sign, and if we can break above the 0.90 level to continue to go much higher. I believe that the market is trying to break out above there, and with the EUR/USD pair slicing out of a massive consolidation area over the last 3 years, it makes sense that it will see strength over here as well. I believe that the market is going to go looking towards the 0.92 level next, but it may take some time to get there as this pair doesn’t tend to move very quickly. Pullbacks of this point should continue to find buyers underneath, extending down to the 0.88 handle underneath. I believe that the market is bullish for the longer-term move, and as the Brexit negotiations continue, we could see this market try to make a move towards parity. That’s obviously a very long-term move though.

Buying dips

I believe in buying dips, and I believe that the market should continue to find plenty of bullish pressure underneath. With this being the case, it’s likely that we will see the market take advantage of these dips as value. While the British pound has been rallying, the Euro has been much stronger. The easiest way to measure this is looking at both currencies against the US dollar, which is essentially the benchmark for the rest the world. As they are both rallying, but the euro is doing much better, it makes sense that this pair should continue to climb as well as relative strength dictates that to happen. I am not interested in shorting.

EUR/GBP Video 31.7.17