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EUR/GBP forecast for the week of January 8, 2018, Technical Analysis

Christopher Lewis
Updated
The EUR/GBP pair has been choppy yet again during the previous week, as we continue to bounce around in a consolidated range. After all, we are still negotiating the withdrawal of the United Kingdom from the European Union, and that of course is going to present a lot of headline risk in a market that features both currencies.

You can see that this market seems to be very flat overall, as the markets are settling into a 200 PIP range, between the 0.88 level of the bottom, and the 0.90 level on the top. There are plenty of reasons to think that this will continue, as we are negotiating the withdrawal of the United Kingdom from the European Union, thereby offering a lot of headline risk and unknown variables. I think that given enough time, the buyers will return and eventually push the market to the upside, because most traders are going to be much more comfortable with the European Union longer-term then they will the United Kingdom. It’s not to say that the United Kingdom is going to collapse, far from it, but currency traders tend to be very skittish when it comes to risk appetite. After all, we arty know what the European Union is going to look like, while the United Kingdom could be quite different from an investing perspective.

If we were to break above the 0.90 level, the market should then go looking towards the highs at the 0.93 handle. Otherwise, if we break down below the 0.88 handle, the market probably drops to the 0.86 level after that, perhaps even the 0.8250 level if things calm completely undone. Nonetheless, I am bullish, and I do believe in buying on the dips, but I think that this is more of a short-term trader’s type of situation.

EUR/GBP Video 08.01.18

This article was originally posted on FX Empire

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