EUR/USD and GBP/USD Forecast - 13 January 2017

EUR/USD

The EUR/USD pair rallied during the session on Thursday, testing the 1.07 level above. That’s an area of that could cause quite a bit of resistance, and I think that the resistance extends all the way to the 1.0775 region or so. You can see that towards the end of the day we turned around and show signs of weakness, so I think that were going to struggle to break above the 1.07 level, and therefore I’m looking for selling opportunities off short-term charts. An exhaustive candle is reason enough for me to start selling again, as I think we will eventually drop back down towards the 1.05 handle underneath which should be supportive. Lots of volatility in negative pressure is what I’m expecting the see in this market.

EURUSD

GBP/USD

The British pound initially tried to rally during the session on Thursday, but found enough resistance above the 1.23 level to turn things back around and form an exhaustive candle. The markets continue to have quite a bit of negative pressure, and with this being the case I feel that the market will continue to show negative pressure every time we rally, so short-term rallies that show signs of exhaustion will be used to continue to pick up “value” in the US dollar.

The exhaustive candle for the session on Thursday suggests that we may trying to break down below the bottom of the hammer from the Wednesday session going forward. The 1.20 level below I believe is a massive floor in this market, but there is the possibility we break down below there. If we do, the market should then reach down to the 1.15 level which is massive support on longer-term charts, based upon monthly time frames. Ultimately, I have no interest in buying the British pound as there is so much negativity around that currency.

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.