EUR/USD
The EUR/USD pair fell during the course of the day on Friday, slicing through the 1.10 support level. I find this important, because the 1.10 level has been fairly supportive over the last couple of weeks. We have been consolidating between that level and the 1.12 handle, so at this point in time I feel that we are ready to break down and perhaps fulfill a 200 pip move to the downside, based upon the size of the rectangle. Beyond that, I feel that the Euro will continue to struggle against the US dollar, if nothing else based upon a “safety bid” going forward. After all, we have to keep in mind that the European Union has a lot of uncertainty going on in it right now, with not only the British leaving but also all of the rather dreary looking economic numbers.
GBP/USD
The British pound fell again during the day on Friday as we should continue to see bearish pressure in this market. I think that anytime this market rallies you have to look at it as a potential selling opportunity. Quite frankly, this is a market that I do believe breaks down given enough time but the 1.30 level has a significant amount of support just below at extending all the way to at least the 1.28 handle. That being the case, I think it’s easier to simply sell off of short-term bounces more than anything else.
The 1.35 level above is resistance, and I think that resistance extends all the way to the top of the gap, reaching towards the 1.3650 level. In other words, I really don’t have any interest in buying and I believe that this market will continue to offer short-term selling opportunities again and again, and then eventually break down below the 1.28 handle and start reaching towards the 1.25 level over the longer term.
