EUR/GBP Price Forecast January 3, 2018, Technical Analysis

The EUR/GBP pair initially drafted higher, and then spiked to reach above the 0.89 level. We pull back from there and now look likely to find support underneath. The market continues to drift to the upside, and I think that eventually we will find this pair reaching towards the 0.90 level above. The market should continue to be very noisy and choppy, but I believe it will continue to favor the upside as the European Union should be thought of as more stable than the United Kingdom going forward. I think that the market should continue to be one that you can buy on dips, but you need to be very careful as the volatility could cause serious swings in your profit and loss. Because of this, keep your position size small but I think at this point it’s much easier to go long that it is to try to short this market. If we were to break down below the 0.88 handle, then I think the market could drop from there, but I don’t expect that to be the case. Eventually, I anticipate that the market should break above the 0.90 level, and then go looking towards the 0.93 level.

Certainly, the biggest concern that we are going to have with this market place is going to be headline risk coming out of both Brussels and London as we continue the negotiations between the 2 economies. Longer-term though, I believe that the buyers will return.

Economic Calendar