The EUR/USD pair fell initially during the day on Thursday, but found enough support at the 1.17 level to turn around and form a hammer. The hammer is a very bullish sign, and it’s likely that we should continue to see buyers jump into this market as long as we can stay above the 1.17 handle. I am a buyer of dips, and I believe that the market should then go looking towards the 1.18 handle, and then eventually the 1.19 level after that. If we did breakdown below the 1.17 level with any type of significance, we will probably go looking to the 1.16 level next. All things being equal, I believe that the market does go higher, as the uptrend is very much intact and the 1.20 level looks to be very attractive for longer-term traders.
The British pound fell during the day on Thursday, breaking below the 1.30 level. We do see a bit of support underneath, especially near the 1.2950 level. It is because of this that I’m not quite ready to start selling. However, if we break down below the bottom of the range for both the Tuesday and Thursday candles, at that point I’m willing to sell this market as we should drop significantly. If we can break above the 1.3050 level, then I would be a buyer. In the meantime, I think that we will grind back and forth, and a relatively tight range. If we did breakdown though, I think that the next major support area will be somewhere closer to the 1.2850 level. A move higher should send this market looking towards the 1.32 level above, which is the most recent high again. Given enough time, we have to make a reasonably impulsive candle, and I’m going to follow it.