EURGBP Forecast: UK General Elections Ahead
- Weak Euro.
- ECB Monetary Policy Decision on Dec 12th.
- ECB is expected to keep its monetary policy unchanged. The wait-and-see policy and emphasis on financial supporting can be expected to continue.
- UK General Elections and Brexit: General election poll projection claims Tories are set to win a 48-seat majority. The fact that the Conservative Party wins the elections with a majority, Boris Johnson is expected to activate the Brexit plan, which he had previously failed to approve in Parliament. And this will increase the possibility that Brexit will take place on January 30th.
- Cheap Sterling and potential upside rooms in GBP Index confirm the bearish continuation in EURGBP pair.
The pair ended the week at 0.85113, below EMA 50, SMA 100 & SMA200. EMA 50 cuts the SMA100 which is a strong bearish signal. Upside is capped by SMA 100 and EMA50 at 0.88000. And potential pullbacks towards the resistance zone can be used as a selling opportunity.
As seen on the Headline Daily Chart, we have achieved our first target of Measured Move Down at 0.85200. The next key target of the pair is 0.84550 as long as it holds below 0.85000.
Our medium term price prediction is 0.82800. BoE’s Monetary Policiy Decision will determine the next direction of the pair. However we keep our Q4 2020 price prediction as 0.80600.
Our latest short term short trades – Bearish Swan, Pennant and Bearish Camel Run – reached their target levels.
The first target of the Camel Bearish Run was 0.85000. As we mentioned and updated on the live interactive charts, our next targets are 0.84820 ( Camel Run ) and 0.84570 ( Structural Target of the Pennant ).
Bullish ABCD pattern would be validated at 0.84800 and we may see a technical correction between 0.84800 and 0.84580 towards 0.85400 – 0.85600 region.
As usual we plan to sell potential pullbacks targeting 0.84500, 0.83800 and 0.82800.
Intraday trade opportunities will be posted later.
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