EUR/USD
The EUR/USD pair has done almost nothing during the trading session on Friday, as we hang about the 1.23 level. This is an area that has been important for the last couple of weeks, if not months, but longer-term I believe that the 1.21 level underneath is the beginning of the “floor” in the market. I would also point out that the 50-day EMA is just below, and it looks as if it is trying to offer a bit of dynamic support. I think that even if we do break down for here, it’s not until we break down below the uptrend line below that I would be concerned about the uptrend. I would look at those pullbacks as value, just as a break above the Thursday shooting star would be a bullish sign and suggest that the market is reaching towards the 1.25 handle.
GBP/USD
The GBP/USD pair has gone back and forth during the trading session on Friday, reaching towards the 1.40 level. I feel that it’s only a matter of time before the markets break above there and continue to go higher. If we do, I think the next target would be the 1.4150 level, and then eventually the 1.43 level after that. The market has a significant amount of support underneath that the 50 EMA is providing. Even on a breakdown from here, the market should have plenty of support at the uptrend line, so at this point I don’t have any interest in shorting. If the US dollar falls in general, that should continue to push this market to the upside as well, but I recognize that there is a lot of noise between here and the 1.45 level. I think the given enough time; any pullback should be thought of as value.
