EUR/GBP Price Forecast January 15, 2018, Technical Analysis

The EUR/GBP pair has tried to rally during the trading session on Friday, but rolled around rather drastically and fell. That being said, we are still very much within the consolidation area, so I expect to see buyers underneath. · FX Empire

Christopher Lewis

Updated Fri, Jan 12, 2018, 6:32 PM

The EUR/GBP pair initially tried to break significantly above the 0.89 level, but has offered more than enough resistance to turn around and break down. We had reached towards the 0.8850 level, an area that has been supportive in the past, as well as resistive. I think we will eventually see buyers get involved in this market, but we will probably find them a little closer to the 0.88 handle, which is the bottom of the longer-term consolidation. If we were to break down below there, that would be very negative, but at the moment, the Euro and the Pound have both exploded to the upside against the US dollar, breaking major barriers. In other words, this is a fight between 2 very strong currencies.

Adding to the noise is the fact that we have the negotiations going on between the European Union and the United Kingdom, and that will continue to cause issues. If we can break above the 0.90 level above, the market should continue to go even higher, reaching towards the 0.93 level. The volatility continues, but given enough time I think we will see buyers jump in as it is probably a much more stable environment to trade in Europe as opposed the United Kingdom which will have a lot of things to prove after the breakup. Buying dips and trading short-term is the way to go going forward, but I believe that buying is probably the easiest way to go. I do like this market for the 0.93 level, but obviously it’s got a lot of work to do.