EUR/USD and GBP/USD Forecast - 7 March 2016

EUR/USD

During the day on Friday, we had quite a bit of volatility as you would expect. After all, it was Nonfarm Payroll Friday, which causes quite a bit of volatility in the currency markets. The market went back and forth and as a result the volatility was extreme. We initially fell to the 1.09 level, and then turned around back around to test the massive resistance at the 1.1050 level. We ended up pulling back a bit, and settling at roughly 1.10, but think at this point in time it looks as if we are going to continue to go higher given enough time. Once we break above the 1.1050 level, we not only break above a resistance barrier, but we also break above the top of the weekly hammer, a very bullish sign indeed.

EURUSD

GBP/USD

The GBP/USD pair went back and forth during the course of the session on Friday, and much like the Euro, it fell initially. However, we turned back around to form a positive candle, as we closed somewhere near the 1.4225 level. I believe that we continue to go a little bit higher, but there is a lot of resistance just above that could cause this market to turn things back around. An exhaustive candle is reason enough to start selling as far as I can see, as the British pound is under quite a bit of pressure over the longer term.

Honestly, there’s not much in the way of opportunity to go long at this point as far as I can see, at least not until we break above the 1.46 level, which would have us breaking out to the upside and sending the market much higher as it would then have broken through quite a bit of noise. This being the case though, I believe that the simplest trade is to wait for the exhaustion and simply take advantage of the longer-term downtrend.

GBPUSD

Christopher Lewis

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.