EUR/GBP Price Forecast – noisy after ECB meeting

The Euro initially tried to rally during the day on Thursday, but then broke down significantly after the ECB announced that it was stepping away from quantitative easing, but not completely. That shows that the market was hoping for a complete wipeout of quantitative easing, but as we are moving away from that announcement, there are signs of rallying again. I think that the market is going to continue to go back and forth around the 0.88 level, and at this point I think that it’s likely that we continue to meander around this area. I think there is enough support underneath to keep this market somewhat alive, but at this point I think that we go back and forth more than anything else offering a range bound trading system type of situation.

If we did break above the 0.8833 level, the market could then go to the 0.89 handle. That would take a significant amount of momentum, so I think at this point it’s probably best to think of this as a situation that you can take short-term positions on more than anything else. I would not put too much into this market as far as trading capital is concerned, because the moves will be so tight. However, for those of you who like the short term type of back-and-forth action, this is going to be one of the better currency pairs to trade over the next several days.