EUR/USD and GBP/USD Forecast - 28 January 2019
The Euro has turned around completely during the day on Friday, wiping out the losses from the Thursday session in what has been a brutal reversal. The 1.13 level has offered significant support, and I think at this point the market is trying to bottom. The 61.8% Fibonacci retracement level is underneath at the 1.12 level, and I think that is trying to be the absolute bottom of the retracement. However, even though I think we are going to tilt to the upside, I believe that the move higher is going to be more of a grind and I do not think we will see big moves. This is going to be a market that is going to take a lot of patience to take advantage of. The 1.15 level above is massive resistance just as the 200 day EMA is.
The British pound continues the levitate, as the Brexit is now almost assuredly going to be delayed. Because of this, the likelihood of a “no deal Brexit” has been pushed back, and we are now well above the 200 day EMA. However, we do need to pullback and offer value to traders that want to get involved. Now that we are at the 1.32 level, we could get that pullback and quite frankly I think that traders will continue to “buy on the dips” going forward as we should see the British pound look towards the 1.35 level above. The 200 day EMA underneath is obvious support, as it is just below the 1.30 level. I do like the British pound for the short term, but I think it’s a little too rich and too short of a time as a short covering rally has been so parabolic. Look for value.