EUR/GBP Price Forecast January 8, 2018, Technical Analysis

The EUR/GBP pair fell on Friday, reaching down towards the 0.8 a 75 handle. The market looks likely to be supported under this area though, and on the hourly chart we are trying to cross in the oversold part of the stochastic oscillator. I think that it is only a matter of time before the market rallies from here, and goes looking towards the 0.89 level again, and perhaps even the 0.90 level after that. The market has been consolidating overall between the 0.88 handle on the bottom and the 0.90 level of the top. The choppiness should continue though, because there are a lot of headlines that could move the markets. After all, we are negotiating the exit of the United Kingdom from the European Union, and therefore it’s likely that we will see a lot of noise based around those conversations.

I believe that the market will eventually break out to the upside, because quite frankly most traders are going to be much more comfortable holding the EUR over the GBP, as the European Union will more than likely be much more stable than the United Kingdom going forward the next couple of years. Traders love the idea of stability, so I think that puts a natural bid in the market which has been in an uptrend for years anyway. If we were to break down below the 0.88 level, that of course would be very negative, but seems to be unlikely at this point as value hunters continue to come back.

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