EUR/GBP Price Forecast February 1, 2018, Technical Analysis

The EUR/GBP pair initially fell during the day but turned around to explode to the upside and break above the 0.88 handle. We then pulled back again, and with this tells me is that we are still waiting for some type of clarity in this market. I believe that eventually, we will have to make some type of decision. The biggest thing at this point is going to be waiting for that decision to become obvious, and simply following. I think if we can break to a fresh, new high which would be just above the 0.8833 level, then the buyers will probably flood into the market. It does look like we are trying to build up a bit of a base here, but it’s very difficult to deal with this type of volatility in the short term.

Pullback should offer buying opportunities, but if we manage to break down below the 0.8750 level, the market then probably breaks out to the 0.87 level. This market has seen a lot of damage done as of late, and of course headlines coming out of the negotiations between Brussels and London will continue to be a major driver. In general, the US dollar is falling, so both of these currencies have seen strength against the greenback during the day, causing even more volatility. Longer-term, I anticipate that this market will try to regain the uptrend, the question is whether it will do it now, or after a move down towards the 0.86 handle.

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