EUR/USD
The Euro initially tried to rally during the day on Friday but turned right back around as the 1.1350 level above has offered quite a bit of resistance. As we have fallen from there, we crashed into the 1.12 level. That’s an area that is the bottom of the recent consolidation area, so it makes sense that we see quite a bit of noise and support right there. With this being the case, I think that the market will continue to try to grind lower, but we may have short-term bounces from time to time. It certainly looks very negative after the Friday session though, so I am a seller overall but recognize that the volatility will be a factor in this market, so hang on.
GBP/USD
The British pound initially rallied during the day on Friday but turned right back around in order to form a bit of a shooting star. This is a market that continues to struggle in general, so having said that I think that every time this market rallies you have to start thinking about selling again. The first sign of exhaustion is exactly what I want to get involved, because I do believe that we will break down even farther given enough time, and one the volume picks back up we will more than likely try to reach towards the 1.25 handle. I think that the 1.35 level above is essentially the “ceiling” in this market, and as a result I believe that every time we are close to that area people will jump into this market and start selling rapidly.
Another reason that I believe that the 1.35 level is so important is that we have the gap just above there that should continue to offer resistance as well. With this, I have absolutely no interest in buying this pair and just simply look for opportunities to take advantage of “value” in the greenback.
