EUR/USD and GBP/USD Forecast - 11 July 2016

EUR/USD

The EUR/USD pair went back and forth during the course of the day on Friday in reaction to the much stronger than anticipated jobs number in America. Because of this, there would’ve been a lot of position squaring as several different factors are working at the same time. Ultimately, I do believe that this market falls, mainly because there is so much in the way of uncertainty when it comes to the European Union. Not only do we have questions after the United Kingdom voted to leave, we also have problems in the European banking system that are starting to flare up yet again. With this, I believe that there is going to be more confidence in the US dollar than the Euro. I am a seller of short-term rallies that show signs of exhaustion but I’m not looking for any type of meltdown.

EURUSD

GBP/USD

The British pound rallied during the day on Friday, in reaction to the better than anticipated jobs number. This was essentially a “risk on” move, and as a result the British pound was bought initially. However, the 1.30 level has offered enough resistance to turn the market back around and form a shooting star just as we did on Thursday. Because of this, I believe that this market will continue to go lower but we also have a hammer from the Wednesday session that suggests perhaps we need to go sideways for the short-term.

Any rally at this point in time should end up being a nice selling opportunity given enough time anyway, so I am essentially “sell only” when it comes to the British pound as we continue to try to measure the damage done by the United Kingdom leaving the European Union. Ultimately, I feel that it is very difficult to hang onto any long position anyway, so I am more apt to simply sell rallies as they appear.

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.