EUR/GBP Price Forecast January 29, 2018, Technical Analysis

The EUR/GBP pair has broken down significantly over the last several sessions, and although we’ve seen a bit of a rally on Friday, I think we will eventually see sellers come back in. The 0.88 level above is crucial, and it’s not until we break above there that I am willing to buy this pair. I suspect it will be massively resistive due to the previous support, and I think that it is a market just waiting for an opportunity to start selling and given enough time we should get that. If we break down, we will more than likely go hunting the 0.86 level below, which is a larger timeframe support level. Alternately, if we break above the 0.88 level, then I think the market probably must cut through the 0.8825 level, and above there it’s free to go much higher.

I believe that the market should continue to be driven by headlines coming out above London and Brussels, as we continue to see negotiations going back and forth. That negotiation situation of course will cause a lot of noise, and therefore we could get sudden moves. However, it appears that the British pound is starting to gain a bit of strength in general, and therefore we may have to continue the drift lower. For some time, we had seen the market rallying every time it came to the 0.88 handle, but that support has been violated, which of course is a very sign.

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