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EUR/GBP Price Forecast January 31, 2018, Technical Analysis

Christopher Lewis
Updated
The EUR/GBP pair rally during the trading session on Tuesday but pulled back a little bit to test the 0.88 level for support. This gives me an opportunity to pick up this pair on value, and it looks likely that the buyers are about to make another move.

The EUR/GBP pair pulled back after initially trying to break out on Tuesday, but I see it showing signs of support at the 0.88 level, which should be important as it was previous resistance, and of course has been structurally supportive going back several months. I believe that eventually the market will try to reach towards “fair value” of the previous consolidation, so on a rally I would anticipate that the market will probably go towards the 0.89 handle.

The market continues to be very volatile, but that makes sense as we are going through the negotiation process between the United Kingdom and the European Union regarding the British leaving that economic block. Ultimately, I believe that the pair will continue to rally based upon the previous action, but we need to clear the 0.8833 level to be free to go higher. Ultimately, I think that if we do break down, we could go as low as the 0.86 handle, and I also believe that a lot of what happens next will be due to how the negotiations turned out.

This pair tends to be very choppy, and I think that will continue to be how we see this market behave over the next several months. Later this year, I think we could see this market going as high as parity, but that depends on the results of the previously mentioned negotiations. At the very least, if we break out to the upside I anticipate that we will reenter the previous consolidation which has a ceiling at 0.90 above.

EUR/GBP Video 31.01.18

This article was originally posted on FX Empire

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