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

The EUR/GBP pair has shown quite a bit of volatility on Friday, breaking above the vital 0.88 level. By doing so, the market looks likely to reach towards the 0.8825 handle, and if we can break above there the market is likely to go much higher, perhaps reaching towards the 0.89 level which is the “fair value” of the previous consolidation area. The 0.88 level could offer a bit of support here, but quite frankly it’s more likely that we will see this market go back and forth, perhaps falling and continuing the overall consolidation. If that’s the case, I would fully anticipate a return to the 0.8725 region. It’s hard to tell so far, so I will wait for the break out to start buying or move down below the 0.8780 level to start selling. We have essentially made a “higher low” on the short-term charts, so we could be trying to form a bit of a base to break back into the previous consolidation.

This market of course is highly sensitive to the headlines coming out of both Brussels and London, so this is a market that has been very difficult to manage for a longer-term move since those conversations started. I believe that position should be short-term at best, and most certainly in smaller amounts as a sudden headline can shoot this market in one direction or the other, and there’s no way to anticipate what could come out of the mouths of certain politicians.