EUR/USD
The EUR/USD pair initially rallied on Friday, but as we have seen all week, rolled over as the 1.23 level has offered far too much in the way of resistance. The daily candle is a shooting star, and I suspect that we are going to pull back at this point. However, that doesn’t necessarily mean that we are going to fall apart, it just means that we are probably going to go looking for support at lower levels. I suspect that the 1.21 level underneath will be supportive, and that the support should reach down to the 1.20 level. Any type of supportive bounce or candle on the daily chart underneath current levels to be an opportunity as it offers value. I don’t have any interest in shorting this pair, we have broken above a major resistance barriers recently, which of course is a very bullish sign.
GBP/USD
The British pound tried to rally during the day but gave back the gains for the session. I think that the market probably needs to pull back at this point, as the US dollar is oversold against most currencies. The British pound should have plenty of support at the 1.3650 level though, so I think that a pullback to that area should be thought of as a move to value that you can take advantage of. I think that the market will go looking towards the 1.40 level above, which is massive resistance. If we can break above that large, round, psychologically significant barrier, the market should then go higher, which is exactly what I expect to happen longer term. At that point, we should then go hunting the 1.4250 level above, and then eventually the 1.45 handle after that. I don’t have any interest in selling.
