EUR/GBP Price Forecast January 11, 2018, Technical Analysis

The Euro rallied rather significantly during the trading session on Wednesday, reaching as high as the 0.8875 handle. Ultimately, this is a market that I think remains consolidation, between the 0.88 level underneath, and the 0.90 level above. I think that the market will bounce between the important areas, and as we were close to the bottom of the range, it makes sense that we would rally from there. I think that there is going to be a lot of noise going forward though, because quite frankly there are so many headlines coming out of the negotiations between the European Union and the United Kingdom. Because of this, expect sudden and volatile movements, and therefore you should be careful.

I think that the 0.89 level above is essentially “fair value”, and that looks likely to be a bit of a magnet for price. I suspect that the market will go looking towards that level next, and that the short pullback that we have seen later in the day on Wednesday will probably end up being a buying opportunity. I must certainly see a lot of support at the 0.8825 level, so I’m willing to put money to work as certainly we have seen a return of the Euro bulls. Beyond that, the British pound has a massive barrier above current trading against the US dollar, which of course is the benchmark for that currencies value. If we can finally break above the 0.90 level, the market is free to go much higher.

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