EUR/GBP Price Forecast – Euro rallies against Sterling on Friday

The Euro rallied significantly during the trading session on Friday, reaching towards the 0.8750 level. I think at this point the market is trying to digest the ECB and its actions during the day on Thursday. The market sold off rather drastically after the European Central Bank suggested that interest rate hikes are something to look for in summer of 2019, much later than people anticipated. Because of this, I think that a move lower is likely to happen, but if we were to break above the 0.8750 level, we could reach towards the 0.88 level above. Otherwise, we will more than likely continue to consolidate in this tight range, perhaps eventually reaching towards the 0.87 level over the longer-term. If we break down below that level, the market then goes looking for the 0.86 handle. It’s not until we break above the 0.8825 that I would consider buying this pair for any significant length of time. There is a lot of noise in this market and should continue to be very noisy due to the negotiations between the UK and the EU anyway.

I believe that short-term trading is about as good as this gets, so you need to keep that in mind and I think that it’s only a matter of time before we get a sudden reversal of any significant move. I do believe in the downside currently, but I don’t believe that you can hang onto any position for a long amount of time.