EUR/GBP Forecast Today 16/04: Pound Breakout (Chart)

(MENAFN- Daily Forex)

• During the trading session on Tuesday, we have seen the euro initially tried to rally against the British pound, but it got absolutely crushed as it looks like we are trying to drum back down toward the 0.85 level.
• This is an interesting trade that I talked about recently, but I also think the limited downside should be kept in the back of your mind.
• I think the real story will be told at the crucial 0.85 level, because if it does in fact end up holding as support, that would be an extraordinarily bullish sign.

Noisy Tariff Wars and Such

Keep in mind that there is a lot of noise out there with tariff wars, and while these 2 currencies don't reflect a couple of economies going after each other, the reality is that the euro had gotten overbought against the US dollar and a whole host of other foreign currencies, so it needed to pull back. The question now is whether or not it can find its footing in turn things around? I do think the 0.85 level will tell the story. Furthermore, you need to keep in mind that Friday has most major economies shutting down large portions of their markets, so this decision may end up being made after the ECB press conference on Thursday.

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I do think that it's very unlikely that the markets will be easy anytime soon, and I just don't think that this currency pair will be any different. Keep in mind that the pip value in this market is higher than many others, so it doesn't take as much real estate to make a profit here. If you can make 50 pips in this chair, it's a lot more impressive than other currency pairs such as the USD/JPY. Ultimately, I think we are getting close to an area where some value hunters might be interested, but I suspect that the next 2 days could be somewhat stagnant in this pair, before setting up for a bigger trade.

EURUSD Chart by TradingView

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