EUR/GBP Price Forecast March 26, 2018, Technical Analysis

The EUR/GBP pair broke down a bit during the trading session on Thursday, reaching a fresh, new low over the last several months. By bouncing the way it did, ended up forming a hammer. Friday was a bit quieter, which is typical after forming a hammer, because it is the market trying to figure out whether it is “safe” to get involved to the upside. I think that if we can break down below the bottom of the hammer from the session on Thursday, this market drifts down to the 0.86 level rather quickly, but on the other hand if we were to break above the highs from the Friday session, it could probably send the market to the 0.88 handle, and then eventually the 0.8950 level.

I believe that this market will continue to be very noisy, because on one end of the spectrum, we have the Bank of England looking likely to raise interest rates, but on the other hand we have a lot of concerns about where Great Britain goes next. I think at this point the easiest trade will probably be to take the short trade if we break down below that hammer, as it would show a continuation. However, it is a technically prudent signal to take the upside if we break above the highs of the Friday session, even though it’s probably going to be choppy. This is a market that can tend to use to be very noisy overall, which makes sense as we continue to go through the entire breakout process.