The EUR/USD pair broke down significantly during the day on Thursday, breaking below the bottom of a shooting star from the Wednesday session. The 1.13 level offered significant resistance, and then turned around to form a shooting star. A breakdown below the bottom of the shooting star is a very negative sign as well, and it now looks as if we may go looking for support below. , I think that the market continues to process the idea of a more hawkish Federal Reserve than originally thought of, and I think that should continue to favor the US dollar. I suspect we will probably reach towards the 1.10 level underneath. On the other end, if we broke above the 1.13 level, the market should continue to go much higher.
The British pound has been a mess as of late, and the session on Thursday was no different. We continue to bounce around and hover around the 1.2750 level. The 1.28 level offers resistance, and if we can break above there, I feel that the market goes towards the 1.29 level. On the other hand, if we breakdown below the bottom of the range I think we will go reaching towards the 1.2650 level below. A breakdown below there would be very negative. Ultimately, the market should continue to show volatility, as there are so many pieces that are moving around at the same time coming out of London.
The markets could be difficult to navigate, so I would keep position small if you feel the need to trade this market. We need to form some type of impulsive candle to get some clarity, but until we get that, I will step away from this pair as I think it will be far too easy to lose money.