EUR/USD and GBP/USD Forecast - 5 September 2016

EUR/USD

The EUR/USD pair broke higher during the course of the day on Friday, clearing the 1.12 level at one point. However, we turn right back around to form a very bearish looking candle after the jobs number, and as a result I think that we are going to continue to see selling pressure again and again. Because of this, the market could very well break down from here, and reach down to the 1.11 level, and of course the 1.10 level below. On the other hand, if we can break above the top of the candle that could be a very bullish sign. However, the one thing that I think that will be the common factor in this market is that we are going to chop back and forth and cause quite a few headaches for traders around the world.

EURUSD

GBP/USD

The British pound initially tried to rally during the course of the session on Friday, but turned right back around to form a shooting star which of course is a negative sign. With this being the case, it’s very likely that a break down below the bottom of that level will be a nice selling opportunity that we can take advantage of, and I fully anticipate doing so. Ultimately, we could drop all the way down to the 1.30 level without too many issues, and we break down below there we could reach towards the 1.2850 level.

This market will continue to struggle to get above the 1.34 level, which is the beginning of a significant amount of resistance all the way to the 1.3650 level. Ultimately, this is a market that I believe will find sellers given enough time every time we rally but exhaustive candles are the cues for me to start selling yet again. It is the longer-term trend and there’s no reason whatsoever to go against it.

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.