EUR/GBP Price Forecast January 19, 2018, Technical Analysis

The EUR/GBP pair has been very noisy during the trading session on Thursday, as the 0.88 level underneath continues to be very supportive. That’s the bottom of the longer-term consolidation, which has been very reliable for some time. The 0.88 level being broken to the downside is only happened once in the last several months, and it was very briefly to say the least. The market should continue to recognize this is an area where buyers get involved, and then try to get back to the 0.90 level above. The 0.89 level in the middle is essentially “fair value”, so it makes sense that a bounce will go looking for at least that level.

The alternate scenario is of course that we do break down, and that the support finally gets taken out. However, that seems to be very unlikely, and I think that there will be a lot of noise in this market due to the negotiations between the EU and the UK, which of course will dominate the headlines. Longer-term, I suspect that this market will probably go looking to break above the top of the range, and then send price to the 0.93 level after that. If we do break down, we could go as low as 0.86, which is an area that has been significantly important on the longer-term charts as well. I think trading this market from a range bound attitude continues to pay dividends, so using such systems will continue to be the way.