EUR/GBP Price Forecast February 21, 2018, Technical Analysis

The EUR/GBP pair broke down during the trading session on Tuesday, reaching down towards the 0.88 level. That’s an area that has previously been both support and resistance, so it’s not difficult to imagine that the markets will be very noisy in this area. I believe that the market will continue to be noisy in general, as we have a lot of potential headline risk in this pair due to the negotiations between the United Kingdom and the European Union. I think that is going to continue to be the problem for the next several months, so at this point I think it’s difficult to hang onto a trade for a long period of time. I think that if we do break down below the 0.88 level, the market is likely to reach towards the 0.8740 level next.

Alternately, if we rally from here, the market probably goes to the 0.8860 level above, and then possibly even assigns the 0.90 level after that. I think that this is a market that you need to take profits in rather quickly, and it’s almost impossible to hang onto a trade for the longer-term, unless of course you have the ability to hang onto wild swings in both profit and loss. However, I think that the overall uptrend should continue, as people will favor the stability of the European Union over the unknown future of the United Kingdom. Ultimately, I think that we will go looking towards the 0.93 level above.

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