EUR/GBP Price Forecast January 18, 2018, Technical Analysis

The EUR/GBP pair initially tried to rally during the trading session on Wednesday, and as you can see it’s likely that the traders are starting to look at this as a slightly oversold condition based upon the stochastic oscillator that is crossing in the oversold condition on the one-hour chart. I think that we will probably bounce towards the 0.89 level, but I recognize there is a significant amount of resistance in that area. If we do break above there, the market then goes looking towards the 0.90 level, as it gives us an opportunity to fulfill the range of the longer-term consolidation that this pair has been in.

The negotiations between the European Union and United Kingdom should continue to be a major driver of volatility in this pair, but when I look at this market I recognize that it’s not until we break down below the 0.88 level that you get a massive selloff, just as it’s not until we break above the 0.90 level that we get a massive melt of. I think that a lot of back and forth and volatile trading is what you need to expect in this market, but that’s okay because of you employ some type of range bound trading strategy, you should do quite well. Remember, the 0.89 level is essentially “fair value” when it comes to the longer-term consolidation, so it will continue to be a massive area of noise.

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