EUR/USD
The EUR/USD pair initially fell on Friday, but found enough support at the 1.0750 region to turn around and form a hammer. It looks as if we are still going to continue to try and break above the resistance to continue going higher. On a move above the 1.0850 level, I feel that the market is free enough to go to the 1.09 handle, and then eventually the 1.10 level. If we break down, it would not be until we get below the 1.07 level what I would feel comfortable selling. At that point, I would anticipate moved to the 1.06 handle. This pair tends to be very volatile and choppy on short-term charts, but unfortunately that’s probably where were going to find ourselves trading as this market has a lot of noise.
GBP/USD
The British pound initially fell on Friday as well but found enough support underneath to turn things around and form a hammer. The hammer sits just underneath the 1.25 handle, and I think we are trying to break out to the upside. However, there is a lot of noise between here and the 1.27 level so it isn’t going to be easy. Even if we pull back, I think the buyers are going to return. The Article 50 being triggered shortly is possibly going to cause a bit of negative pressure, but I think that it will be the end of the selling pressure.
Ultimately, I think if we can break above the 1.26 level the market will pick up more momentum, and once we break above the 1.27 handle, the market is free to go much higher, on a longer-term chart as well. If that’s the case, we could be looking at the very end of the downtrend. I believe that the British pound will continue to go higher of the longer-term so if you are willing to deal with the volatility, this could be a nice buying opportunity.
