EUR/GBP Price Forecast December 27, 2017, Technical Analysis

The Euro initially rallied against the British pound, but continues to find a lot of trouble at the 0.89 level. If we can break above there, the market should continue to go higher, perhaps reaching towards the 0.90 level above. That is a much more significant level, as the 0.89 level is essentially “fair value”, at least in the current consolidation area. The “ceiling” of the market is the 0.90 level above, just as the “floor” of the consolidation is near the 0.88 handle. Because of this, we are essentially an area where things can go either way. Longer-term though, we are in an uptrend and I believe the pullbacks continue to offer nice buying opportunities, so I do favor the upside overall.

There will be a lot of noise due to headlines coming out of both London and Brussels, that’s been the case for a while, and I think it will continue to be a major problem. Eventually though, I believe the buyers will win the day, because traders will be much more comfortable with the European Union then they will the suddenly solo United Kingdom. I think that it’s going to be overdone, markets typically do overdue things, but that leads to a nice longer-term trading opportunity. I still believe that we are going to go to the 0.93 level above, perhaps even the parity level depending on what happens in the negotiations. I have no interest in shorting this market, at least not until we would break down below the 0.8750 level.

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