EUR/GBP forecast for the week of August 10, 2015, Technical Analysis

The EUR/GBP pair initially fell during the course of the week, but found enough support below the 0.70 level to turn things back around to form a hammer. This hammer of course is very bullish, but we feel it only means that we’re going to bounce back into the previous consolidation area. We do not think that this market will go very high from here, and as a result we will simply step on the sidelines and look for selling opportunities at levels above. On the other hand, if we break down below the bottom of a hammer, we would be sellers there as well.