EUR/USD and GBP/USD Forecast - 21 February 2018

EUR/USD

The EUR/USD lost a significant amount of momentum after the initial rally on Tuesday, breaking down to the 61.8% Fibonacci retracement level of the most recent move higher. The market looks likely to continue to find buyers underneath, and I do believe that we eventually rally. In the meantime, I look at these little pullbacks as value, but I would be taken advantage of them in very small increments, as we obviously have a lot of volatility to contend with. Eventually, I do think that we break above the 1.25 level, but as you to take a certain amount of momentum building to accomplish this. Because of this I remain bullish but cautious, and I will be on the sidelines until I see the market prove itself a little bit.

EURUSD

GBP/USD

The British pound was very noisy during the trading session on Tuesday as well, as we continue to hover around the 1.40 level. I think this market is trying to find buyers underneath, and the neutral candle during the day on Tuesday is a good start. If we can break above the top of the range for the trading session I believe that we will then go looking towards the 1.41 level above, and then possibly the 1.43 level. A breakdown below the bottom of the candle sends this market looking towards the 50 EMA that I have marked on the chart, a common area of dynamic support. I believe that the British pound will continue to try to rally, and if you squint, you can make out an uptrend line that I don’t have marked on the chart. In other words, I do think that the buyers return, but we may need to drift around a little bit and build up confidence before we take off.

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.