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EUR/GBP Price forecast for the week of December 11, 2017, Technical Analysis

The EUR/GBP pair initially was negative during the week, but turned around to form a very bullish looking candle for the close.

The EUR/GBP pair had a volatile week, reaching down to the 61.8% Fibonacci retracement level. We bounced enough to form a hammer though, and I believe that a break above the top of the weekly candle is a sign that we should go higher, perhaps reaching towards the 0.90 level above which has been the recent consolidation. With several headlines coming out of the negotiations between London and Brussels, the noise of course makes sense as we have had so much in the way of order flow in both directions. If we were to break down below the bottom of the hammer, that would be a very negative sign and send this market looking for the 100% Fibonacci retracement level, the 0.83 handle. Ultimately, the buyers will try to push towards the previously mentioned 0.90 level, and perhaps even break above there as we could continue to reach towards the 0.93 handle.

I believe that the volatility continues, but the uptrend is still intact, and I believe nothing has changed overall. I think between now and the end of the year, we should see a lot of choppy back and forth type of trading action, perhaps making it a bit difficult for longer-term traders who are not of the “buy-and-hold” attitude. Ultimately, I think that a small trading position in a range bound trading system is probably the best way to play this market, but longer-term I would anticipate that the buyers should win the day. If we do break down below the hammer from the weekly candle though, at that point I would not only be short, but I would be aggressively short, expecting the move down to the 0.83 handle. I would be very surprised if we can break down below that level.

EUR/GBP Video 11.12.17

This article was originally posted on FX Empire

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