EUR/USD
During the day on Thursday, the EUR/USD pair fell a bit during the course of the day, but found enough support to turn things back around and form a bit of a hammer. This was preceded by a couple of hammers as well on the daily chart, so at this point in time I believe there is a massive amount of support for the Euro. I have a red line at the 1.1050 level, and that is where I believe it’s going to be time to start buying this pair again. On a break above there, I believe that the market may try to reach towards the 1.13 handle, possibly even the 1.15 handle.
This is not to say that I think it’s an easy move, or that we will shoot straight to that level. I think it will be very choppy, and there will be a lot of short-term buying opportunities every time we pullback. Given enough time, I feel that the Euro will continue to strengthen against the US dollar, but with so many headwinds around the world right now, we are going to have a lot of volatility.
GBP/USD
The GBP/USD pair went back and forth during the day on Thursday as well, as we continue to hover just below the 1.40 level. This is a market that is dealing with the question as to whether or not the United Kingdom will leave the European Union. That is one of the biggest anchors around the neck of the British pound right now. With that being the case, it’s very likely that there will still be a lot of headlines risks out there, so I'm more apt to sell this market on short-term rallies and of course a fresh, new low. If we break down from there, it’s possible that we could reach as low as 1.33 in the short-term. And possibly even the 1.30 level over the longer term.
