EUR/USD
The euro initially fell during the session on Thursday but found enough support at the 1.07 level to turn around and start trading higher. The market looks as if there is a significant amount of resistance of the 1.08 level, and as we roll into the fresh session, it looks as if we will target that level. Because of this, I think that short-term buyers will be interested in the market, but I think the real action will happen once we reached the 1.08 handle. If we get an exhaustive candle, it could be time to sell. On the other hand, if we can break above that level and hang above therefore more than four hours, I believe we will continue to go much higher, perhaps reaching towards the 1.10 level over the longer-term.
GBP/USD
The British pound initially fell on Thursday as well, but much like the euro found legs later in the day. As we reach towards the 1.24 level, I cannot help but notice that there is a significant amount of resistance all the way to the 1.26 handle. I think that there is an opportunity to sell soon, but we need to see the exhaustive candle print in that area in order to start shorting. We can somehow break above the 1.26 handle, I feel that the market will go much higher at that point and it will be an area that value hunters start to get involved.
I believe that the article 50 that’s going to be triggered soon will cause a lot of volatility in this market, but ultimately that will probably be the end of the massive selling that we have seen in the British pound overall. I believe that the reaction to leaving the European Union has been overdone, and I believe that a lot of market participants are starting to see the same thing.
