The EUR/GBP pair initially fell during the week, but then turned around to form a hammer. The hammer of course is a bullish sign, and I think that we will continue to see buyers jump into this market place, perhaps reaching towards the top of the overall consolidation at the 0.90 level. A break above that level is extraordinarily bullish, but I think we are probably not going to see that quite yet, especially considering that we have negotiations to go through between London and Brussels. Ultimately, I think that we will eventually see the market break out to the upside, but we need to get through the negotiations before traders are comfortable enough to get involved. Once we break above the 0.90 level, it’s likely that we will go looking towards the highs of the year, near the 0.93 handle. The alternate scenario is that we would breakdown, but it’s not until we sliced through the 0.87 level that I would be concerned about the move higher as we have seen the 61.8% Fibonacci retracement level hold at that level.

The markets continue to be very volatile and choppy, but certainly seem to have a bit of an upward bias. I believe that is going to continue to be the case overall, but you will have to be patient to collect your profits on the straight. If we were to break down below the hammer from a few weeks ago at the 61.8% Fibonacci retracement level, then I think the market drops to the 0.350 level, but that’s the least likely of scenarios that I see.

EUR/GBP Video 02.01.18

This article was originally posted on FX Empire

More From FXEMPIRE:

• Silver Price forecast for the week of January 2, 2018, Technical Analysis

• AUD/USD forecast for the week of January 2, 2018, Technical Analysis

• DAX Index forecast for the week of January 2, 2018, Technical Analysis

• USD/JPY forecast for the week of January 2, 2018, Technical Analysis

• Crude Oil Price forecast for the week of January 2, 2018, Technical Analysis

• Natural Gas forecast for the week of January 2, 2018, Technical Analysis