EUR/GBP Price Forecast January 24, 2018, Technical Analysis

The EUR/GBP pair has broken below the 0.88 level recently, and during the day on Tuesday, we turned around to bounce significantly, reaching towards that level again. That’s an area that should be interesting, and because of this I think we may have a bit of choppiness in the short term.

If we can break above the 0.8825 handle, I think at that point the market would be free to go much higher, and we have done this before, broke below the 0.88 level only to turn around and show signs of strength again. Alternately, if we break down below the 0.8750 level, then we could go down to the 0.87 level. The market will course be choppy regardless, because the market participants will be listening to headlines coming out of both Brussels and London, and that of course is going to be somewhat unpredictable, as the negotiations continue.

I believe that the market is going to be best rated from short-term standpoint, at least until we break out to the upside, assuming it happens. Otherwise, you are probably looking at a 50-point range between 0.88 on the top, and 0.8750 on the bottom. Alternately, if we can break out to the upside, it’s likely that we would go back to “fair value” at the 0.89 level, which is the middle of the longer-term consolidation area. I expect noise more than anything else and would also recommend that trading smaller positions than usual based upon the potential danger.

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