EUR/USD
The EUR/USD pair fell initially during the session on Friday, showing signs of weakness as the jobs number came out a bit better than anticipated. However, by the end of the day when it up forming a hammer which is a bullish sign. I think the 1.17 level underneath is massively supportive, so break above the top of the hammer should send this market looking to fill the gap above, which means we will be targeting the 1.19 handle. Longer-term, I look at the weekly charts and see a bullish flag, so I’m a buyer of dips and have no interest in shorting anytime soon. There will be dips occasionally, but those should be buying opportunities for the longer-term. If we break down below the 1.15 handle, that would change things, but likely won’t happen anytime soon.
GBP/USD
The British pound went back and forth during the trading session as well, testing the 1.35 level resistance, turning back towards the 1.3333 handle. That’s an area that shows significant amounts of support as well, so I think eventually we will break out to the upside. Once we do, we should continue to go much higher, perhaps reaching towards the 1.3650 level. That is the resistance barrier that the market is trying to struggle with, and perhaps break out to the upside. If we do, then I think the market is free to go towards the 1.40 level, and then eventually the 1.50 level. This market continues to be very volatile, and I look at pullbacks as opportunities to pick up value in a currency that had been slaughtered after the vote to leave the European Union. I believe that the fundamentals are still good for the British economy longer term, so therefore a lot of longer-term “buy-and-hold traders” will be involved.
