EUR/GBP Price Forecast February 7, 2018, Technical Analysis

The EUR/GBP pair has been bullish during the trading session on Tuesday, as the British pound has been beaten down rather significantly against the US dollar. While the Euro has struggled as well but has not fallen as hard as the Pound. This is what this pair tends to be, a gauge on relative strength. Since the Euro hasn’t fallen as hard as the British pound, it makes sense that this market continues to rally. We find the market near the 0.89 level, which is essentially “fair value” of the previous consolidation area that the market has been in, but I think the momentum suggests that we are going to continue to rally, perhaps reaching towards the 0.90 level.

The 0.90 level has been massive resistance in the past, so I think it will be difficult to break above there, but I think that there is obviously a bit of noise just below near the 0.8875 level that should continue to offer support. I am a buyer of dips, but I’m not expecting fireworks here, rather more of a grind than anything else. I believe that the 0.88 level will continue to be supportive as well, although we had broken down below there previously. Longer-term, I think this pair will eventually break out of the consolidated area and continue to go towards the 0.95 handle. The alternate scenario of course is if we make a fresh, new low, then that should send this market looking towards the 0.86 level according to the longer-term charts.

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