EUR/USD
The EUR/USD pair went back and forth on Thursday as we continue to see quite a bit of volatility around the 50-day exponential moving average. I believe that the downtrend will more than likely continue, and a breakdown below the bottom of this relatively unimpressive candle for the session on Thursday is the signal I’m looking for in order to start selling, unless of course we rally and find an exhaustive candle above at resistance. I see that resistance as being the 1.0750 level, and it’s not until we close above there on a daily chart that I’m comfortable buying. I believe that the US dollar will continue to strengthen against the Euro, mainly because of the interest rate differential in the outlook of both central banks.
GBP/USD
The British pound rallied slightly during the session on Thursday, as we try to figure out what the next move is. I believe personally that the Theresa May speech that suggested that the UK was going to remain friendly with the European Union, but also highlighted the fact that perhaps the British earned much stronger hands than they once thought was good, but I think the rally in the British pound was a little overdone. The real fight is above at the 1.25 handle, so we can break above there that I think there’s real opportunities for longer-term buy-and-hold type of positions. In the meantime, anytime we show signs of exhaustion near that 1.25 level, I think the sellers will come back. So, with this being said, I’m going to let the dust settle a little bit before putting the money to work in this pair. After all, there are other currency pairs that are in more of a straightforward trend, which is where I prefer to risk my trading capital.
