The EUR/USD pair fell significantly during the day on Thursday, but it still did very little to dissuade the bullish traders out there as the 1.11 level has offered support. That is an area where I would anticipate that a lot of people will be interested in picking up value in a market that has clearly exploded to the upside. If we pull back from here, it’s likely that the 1.10 level underneath their will also continue to be important as well. Because of this, I’m waiting for a bounce or a supportive candle to start going long again. I believe that the market feels it needs to test the 1.12 level above before it’s all said and done, so I don’t have any interest in selling this market. If we did breakdown below the 1.10 level, I think at that point we fall to the 1.0850 level, but that’s the least likely of scenarios.
The British pound had a very volatile session on Thursday as a mystery move happened late in US trading hours. There has been no real explanation for the British pound selling off so drastically in such a short order, but I believe that it has many of the traders out there a bit confused and needless to say probably a bit frazzled. We currently see the uptrend line still offering support though, so that is a good sign, and I believe that we will eventually break out to the upside but obviously we need a daily close above the 1.30 level to feel comfortable buying. I don’t have a scenario in which a willing to start selling, even though today rattled quite a few nerves, there is still plenty of support at the uptrend line, and of course the 1.2750 level underneath.