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EUR/GBP Price Forecast January 22, 2018, Technical Analysis

By:
Christopher Lewis
Updated: Jan 20, 2018, 07:07 UTC

The EUR/GBP pair has rally during the day on Friday, which of course isn’t much of a surprise as the area that we started at as been massive support. Currently, looks as if the overall consolidation will continue, which is good for trading.

EUR/GBP daily chart, January 22, 2018

The EUR/GBP pair bounced during the day on Friday, from the important 0.88 level underneath. The market looks likely to continue to see noise in this market, and of course support based upon the large, round, psychologically important number. I believe that the market should continue to be very noisy in general, but it should continue to look at the 0.89 level as “fair value”, as the longer-term consolidation has been bouncing between the 0.88 level on the bottom, and the 0.90 level above. This is a market that continues to be an area that the market trades in, at least until we get some type of clarity out of the negotiations between the European Union and the United Kingdom. Until then, it’s likely that the pair stays within these areas, because of the uncertainty.

Longer-term, I do favor the upside, simply because we were in an uptrend before the negotiations started, and more importantly, the consolidation. I believe that eventually we will break out above the 0.90 level and go looking towards the 0.93 level, but obviously there’s a lot of work to be done going forward, so these pullbacks will continue. I suspect that a simple range bound trading system is probably the best way to go, and therefore giving us an opportunity to profit in the short term. The market does tend to be very choppy overall, as the pip value is almost twice what other currency pairs are. If we were to break down below the 0.88 level, look for support at the 0.75 level.

EUR/GBP Video 22.01.18

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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