EUR/USD and GBP/USD Forecast - 19 July 2018

EUR/USD

The EUR/USD pair fell towards the 1.16 level during the day on Wednesday, but then turned around to form a bit of a hammer. I believe that the market is trying to form a bit of a bottom right now, but we are currently in a consolidation area, with the 1.15 level underneath offering major support. The 1.1850 level above is significant resistance, extending to the 1.20 level. I think that we will be going sideways for the near-term, but I think that the downward pressure is starting to abate finally, and I believe that the 1.15 level is going to continue to offer a “floor” in the market. If we were to break down below there, it would be extraordinarily negative. I suspect that buying on dips to pick up a bit of value is probably how most traders are going to approach this market.

GBPUSD

GBP/USD

The British pound fell during the trading session during the day as well, reaching towards the 1.30 level. This is an area that of course will offer a lot of support, as it is a psychologically and structurally important level. I anticipate that it is only a matter of time before the buyers return, but if we were to break down below the 1.30 level, there is now a gap that I would be focusing on that is closer to the 1.29 handle. Either way, I think that we have seen the worst of downward pressure, and I think that longer-term traders are starting to come in and pick up a bit of value now that things look so bearish and of course we are approaching such major levels. If we did break down below the 1.29 level, I believe the 1.28 level opens the door to the 1.25 handle.

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.