EUR/GBP Price Forecast January 5, 2018, Technical Analysis

The EUR/GBP pair went back and forth during the trading session on Thursday, testing the 0.8880 level. We rallied from there, and sliced through the 0.89 handle. It looks likely that we are going to continue to go much higher, perhaps reaching towards the 0.90 level as it is the top of the overall consolidation area. I believe that the market will probably try to reach towards the 0.93 level after that, but it may take a bit of building to finally break out and continue the overall strength. I believe the traders will continue to favor the upside though, because the negotiations will almost undoubtedly favor the European Union based upon what we have been reading.

Dips continue to be buying opportunities, and I believe that the 0.88 level underneath is massively supportive, and essentially the bottom of the overall range. I believe that the volatility will probably continue to be an issue, as headlines coming out of the negotiations will take over. However, traders like the idea of stability, and one would have to think that most traders will be more comfortable with the idea of putting money to work in the European Union, as opposed to whatever deal the British get out of the negotiations. Because of this, I think that the market will almost certainly have to reach towards the 0.93 level, and then possibly even the parity level, as many pundits are calling for that. If we did breakdown below the 0.88 level, that could be very negative.

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