EUR/USD and GBP/USD Forecast - 4 February 2019

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EUR/USD

The Euro initially tried to rally during the day on Friday but gave back quite a bit of the gains to form a shooting star just below the 1.15 level. This means that we will probably pull back slightly, but I also look at the 50 day EMA, pictured in red on the chart, and suggests that there is some support underneath. I think we continue to chop around but longer-term I believe that the market continues to try to break out to the upside due to the Federal Reserve. On the other side of the Atlantic though, there is a lot of trouble in Europe so it’s not can be an easy break out. The 200 day EMA, pictured in black on the chart, will be a major barrier to overcome. If we can on a daily close, then I think we go looking towards the 1.18 level. In the meantime, look at a lot of choppiness.

EURUSD

GBP/USD

The British pound initially pulled back during the trading session on Friday but turned around of form a bit of a hammer just above the 200 day EMA. At this point, the downtrend line sits just below as well, so I do think that the British pound continues to rally. That’s not to say that it will be easy but I think the Federal Reserve is starting to be the main focus of the world right now, and there is a believe that the British pound is going to be saved you by either a softer Brexit, or a delayed Brexit. At this point, it’s going to be a lot of noise from the headlines but I do think that we have put a bottom in when it comes to sterling. We will initially target the 1.33 handle, and that eventually the 1.35 level after that.

GBPUSD

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.