EUR/USD
Initially, the EUR/USD pair fell on Friday, but we found enough support below the 1.17 level to turn the market around and form a hammer. I think if we can break out to the upside, specifically the 1.18 level, the market will go looking towards the 1.20 level above which has offered resistance recently. The fact that we formed a hammer suggests to me that perhaps we are starting to see some pushback from the bullish traders out there, and therefore we will continue to fight towards the highs again. If we can break above the 1.21 level, then the market is free to go to the 1.25 level which was my target based upon a recent breakout above the 1.15 handle that marked the top of consolidation for the last several years. I believe in buying dips, and this may be the support that we’ve needed.
GBP/USD
The British pound continue to fall against the US dollar during Friday trading, but did find enough buying pressure just above the 1.30 level to turn things around and form a hammer like candle. I don’t think it’s quite time to start buying, but this does suggest that perhaps the support in this area will hold. That should offer nice buying opportunity, but of course you have to be able to take the risk. I bounce from here could send this market looking for the 1.33 handle, and then perhaps the 1.3650 level given enough time. However, if we were to break down below the 1.30 level, the market probably goes looking towards the 1.2850 level next, and then possibly much lower levels. The selloff has been brutal, as confidence in the Teresa May government in London is waning. However, it would be easy to make an argument that the selloff is over done.
