EUR/USD and GBP/USD Forecast - 27 January 2016

EUR/USD

The EUR/USD pair went back and forth during the course of the day on Tuesday as we continue to see quite a bit of volatility. The one thing that I am focusing on the most though is the fact that the 1.08 level has offered quite a bit of support. Ultimately, I believe that the market will probably turn back around and try to reach the top of consolidation near the 1.0950 level. I think that the market will more than likely be volatile regardless, and as a result you’re going to have to be able to deal with that kind of noise.

I think that there is a significant amount of support all the way down to the 1.07 level though, so I’m not necessarily interested in selling at this point. I think that the market will probably find buyers every time we drop down there, and I don’t really see anything on the horizon that’s going to move this market drastically although we do have an FOMC Statement today, so there could be a bit of a surprise coming out of Washington. Ultimately though, I think it’s probably more geared to go higher at this point.

EURUSD

GBP/USD

The GBP/USD pair initially fell during the course of the day on Tuesday, but found enough support to turn things back around and go higher. I believe that breaking above the 1.53 level does show some strength, but at the end of the day I see a massive amount of resistance that is more than likely going to appear at the 1.45 handle as it is a large, round, psychologically significant number.

I think that exhaustive candles above will be nice selling opportunities, and I have no interest in buying the British pound at this point as the US dollar is without a doubt the strongest currency in the world overall. It is not until we get above the 1.45 level that I will feel comfortable going long.

GBPUSD

 

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.