Category: Forex News, News

EUR/GBP Forecast Today – 31/05: Euro Fights Sellings (Chart)

  • The Euro rallied just a bit during the trading session on Thursday, as we continue to pay close attention to the 0.85 level.
  • The 0.85 level of course is an area that a lot of people will be watching, as it historically has been important, but we also have a lot of psychology attached to a big round figure like this.
  • In general, I think you have to look at this pair as one that is testing a major support level that needs to be acknowledged.

That being said, both of these central banks could cause a bit of a headache, and therefore you need to understand that both may be loose going forward. If that’s going to be the case, then it’s very likely that we could see a situation where we just chop around. That is normal for the EUR/GBP currency pair, not only due to the fact that quite often both central banks have similar monetary policies, but the fact that there is so much cross-border trade between the European Union in the United Kingdom, despite the fact that we were told that the Brexit vote would destroy everything.

Looking for Momentum

At this point, I think we are more or less looking for momentum, and that is something that needs to be acknowledged. If we get any type of momentum at this point in time, I think we could get a situation where traders will jump in and start buying the euro. This will be especially true if the ECB decides to hold on its rate cuts that everybody seems to be waiting for in July. In other words, these are somewhat precarious times that we are dealing with, and in this environment, I think it is very difficult to get overly aggressive, but recognize that if you were to short this market right now, you are betting on a break down that hasn’t been seen for years.

On the upside, we probably struggle to get anywhere above the 0.86 level, so I look at this is a market that’s been consolidating for some time, and that we are at the bottom of the trading range. Nothing more, nothing less.

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