EUR/GBP Price Forecast February 12, 2018, Technical Analysis

The EUR/GBP pair rallied significantly during Friday, after comments coming out of a British negotiator suggested that perhaps the UK was willing to walk away from a trade agreement with the European Union. However, as I record this looks as if we stopped at the first major resistance barrier, so I suspect that this is going to be a short-term trading at best. That’s not to say that we are going to turn around and sell off rather drastically, it’s just that we are probably going to stay within the trading range that we have been in for several weeks. In other words, we could find ourselves falling right back down to the 0.8725 level again.

If we break above the 0.89 handle, then I think we could probably go towards the 0.90 level after that. However, I suspect that the market is a bit skittish and is waiting on clarity to come out of those negotiations before putting serious money to work. In the meantime, if you have a range bound strategy that you wish to deploy on short-term charts, this might be the perfect market to do so. I would look at the 0.88 level as “fair value” in a market that is very much range bound. In other words, you could probably look for a reversion to the mean eventually, and this could offer opportunities for quick “smash and grab” trades. If we were to break above the 0.89 level, then I think we go looking towards the 0.90 level.