EUR/GBP forecast for the week of December 25, 2017, Technical Analysis

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US, China agree to slash tariffs for 90 days

The EUR/GBP pair rallied a bit during the week, but gave back some of the gains later. However, we are well within the established consolidation area, so I think we are going to continue to see more of the same. · FX Empire

Christopher Lewis

Updated Fri, Dec 22, 2017, 10:57 PM

The EUR/GBP pair continues to see volatility, as we broke to the upside during the trading week. The 0.88 level looks likely to be supportive, and therefore I think that short-term pullbacks are buying opportunities. As we rally from here, I expect that the market will go towards the top of the consolidation area that we have been in for the last several months, the 0.90 level. A break above there should send this market looking for the highs again at the 0.93 level. I think that the market does favor the upside as negotiations between Brussels and London continue. This is because there is more certainty in the European Union then there is the United Kingdom going forward, and that of course the tracks money.

If we were to break down below the hammer from 2 weeks previous, that would be a very negative sign and could send this market down to the 0.83 handle. Remember, this pair has a higher value per take, so we don’t need massive amounts of movement to make profit. I think that if we can break above the 0.90 level, I would not only be bullish, but I would be adding to the position at that point. The markets continue to be noisy, and of course will be affected by headlines coming out of the negotiations. This can cause difficult trading conditions, if you are overleveraged the course. This is why I believe in adding slowly in these types of conditions.