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EUR/GBP choppy during difficult Friday session

By:
Christopher Lewis
Updated: Apr 21, 2018, 08:38 UTC

The EUR/GBP pair has been very choppy during the trading session on Friday as we are a bit confused. It’s not a huge surprise, as the market has seen a lot of headline risk coming out of both the European Union and the United Kingdom. However, this past week we have seen headline risk coming in a new form, the idea of the Bank of England being a bit more dovish than anticipated.

EUR/GBP daily chart, April 23, 2018

The EUR/GBP pair has gone back and forth during the trading session on Friday, dancing around the 0.8750 level. The market looks as if it is trying to go higher, based upon what I have seen over the last couple of sessions. However, I think that the market should continue to be very headline driven more than anything else, and with Mark Carney suggesting that perhaps the Bank of England was a bit more dovish than people thought, and I suspect that could continue to put bearish pressure on the British pound. However, when I look at the longer-term chart we have been drifting a bit lower over the longer term, so I look at this pair as one that is essentially mass chaos more than anything else.

I believe that short-term trading with a stochastic oscillator is probably the best way to trade this market, showing signs of overbought and oversold conditions, using short-term charts to scalp this market back and forth. I think that the overall attitude of this market is going to be one of confusion, so I would use small positions in this market as we continue to see a lot of noise that could cause losses if you are not careful. I would only add once we break out of a short-term consolidation and in favor of your trade.

EUR/GBP Video 23.04.18

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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