EUR/USD
The EUR/USD pair initially fell during the session on Friday, but found enough support at the 50-day exponential moving average to turn things around to form a hammer. The 1.0750 level above continues to be massively resistive, so I don’t think we can break above there anytime soon. However, if we do and more importantly: close above there on a daily candle, I’m willing to start buying. Alternately, an exhaustive candle near that area or better yet, a breakdown below the bottom of a hammer from the Thursday session has me selling. One thing I think you can count on in this pair is going to be quite a bit of shopping is over the next several sessions.
GBP/USD
The GBP/USD pair initially fell on Friday, but found enough buyers near the 1.2250 level again to turn the market around for a hammer. However, I see a significant amount of resistance all the way to the 1.25 handle so is not a do we break above there that I’m willing to start buying. Alternately, if we get an exhaustive candle in that area, I feel that the market will turn around. Also, if we can break down below the bottom of a hammer from the session, I feel the market within reach towards 1.20 level underneath. That area is going to be massively supportive, and if we can break down below there it would be the bottom falling out of the market.
The US dollar continues to be strong overall, so it would not surprise me at all to see the market test the 1.20 level again. However, I’m the first to admit that the impulsive candle earlier this week is a bit scary from a seller’s standpoint, so one thing I think you should do is be nimble. Because of this, your short-term charts.
