EUR/USD and GBP/USD Forecast - 12 February 2018

EUR/USD

The EUR/USD pair went back and forth during the trading session on Friday, showing volatility yet again. Just as we did on Thursday, we ended up with a neutral candle, using the 1.22 level as support. We also have resistance at the 1.23 level, so I think that if we can break above there, the uptrend will continue. For what it’s worth, the 50 EMA is just below at the 1.21 handle, the scene of a major breakout. I believe it is only a matter of time before the buyers return, and the uptrend continues. In fact, I think there is enough support to make an argument for buying as low as 1.20. The uptrend line underneath would need to be violated for me to consider shorting. I look at this as a market that is offering value at the lower levels.

EURUSD

GBP/USD

The British pound has rallied a bit during the trading session on Friday to test the 1.40 level, but we found sellers there again. By pulling back towards the 50-day EMA, it looks as if the buyers could return rather soon, and I think that there is a massive support level at the 1.3650 level. Longer-term, I believe that a move above the 1.40 level would be very strong, sending this market towards the 1.43 level. That’s an area that has been massive resistance, so I think we can break above there the market will go much higher, perhaps targeting the 1.45 handle. Ultimately, this is a market that I think is a “buy on the dips” situation, but patience will be needed to continue to see profits. I have no interest in shorting, I believe that the British pound is trying to break out longer-term as well.

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.