EUR/USD
The EUR/USD pair fell during the trading session on Friday, but found enough support at the 1.20 level to show signs of life again. The fact that we have bounce from there suggests to me that the market is trying to build up enough momentum to finally break above the 1.21 handle above, which would be a sign that the market is ready to be more of a “buy-and-hold” scenario. The weekly chart formed a bullish flag that we have recently broken above, but we are fighting a significant barrier. If we can break above the 1.21 handle, I fully anticipate that the EUR/USD pair goes to the 1.23 level next, and then eventually the 1.25 handle. Short-term pullbacks continue to offer plenty of value from what I see, and I have no interest whatsoever in shorting this market until we break down below the 1.19 level.
GBP/USD
The British pound initially fell during the trading session on Friday as well, but turned around to form a slightly positive candle. I think we are trying to grind away and break above to finally clear the 1.3650 level, which is a major barrier on the longer-term charts. We gapped down rather significantly from that level, so to clear that level to the upside, it would be a very bullish sign and should continue to send this market and more of a “buy-and-hold” type of scenario. Until then, I believe that buying pullbacks will continue to be value propositions, and I think that the market will eventually find plenty of reasons to go higher. The 1.3333 level below coincides nicely with an uptrend line that should keep this market bullish in the meantime, and it’s not until we break down below those barriers that I’m willing to sell.
