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

EUR/USD

The Euro initially tried to rally during trading on Tuesday but broke down from the 1.14 level to test the bottom of a symmetrical triangle that we are currently involved with. The market continues to be very noisy, but it looks very likely to continue to show choppiness but I think we are probably more likely to see downside than up momentum, as the market has shown so much negativity in the last couple of days. If we break down below the 1.13 level, then I think we go to the 1.1250 level, perhaps even the 1.12 level in the short term. Keep in mind that there are a lot of issues in the European Union right now, not the least of which are riots in France, the Italian debt situation, and of course on the other side of the Atlantic you have the Federal Reserve getting ready to raise rates again.

EURUSD

GBP/USD

The British pound initially tried to recover some of the losses early on Tuesday but turned around as rumors came out that Teresa May is possibly facing a no-confidence vote. Beyond that, the European Union very likely will be difficult to negotiate with, now that she has been forced to delay the vote to her Brexit deal. I think it’s only a matter of time before the British pound rolls over again, and I think that the 1.27 level above is massive resistance. The 1.25 level is offering significant support though, but I would say that the candle stick that formed for the day shows a continuation of the inverted hammer, and I still believe that we go to the 1.22 handle underneath based upon the measurement of the descending triangle above.

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.