EUR/USD
The EUR/USD pair has fallen to very low levels to close out the session on Thursday. We are approaching major support, so it’ll be interesting to see if we can hold this level here. I do think we will, but if we were to close significantly below the 1.15 handle, then I think the market could drop down to the 1.13 level. In general, I think that we will probably find a reason to bounce, if nothing else because people won’t want to be short of the market going into the weekend. However, I am very cognizant of the fact that the British pound has broken down recently. If the Euro follows, it could be interesting for the next several days. In general, I suspect that eventually somebody will come to pick up this currency. However, keep an open mind and pay attention to what the market tells you.
GBP/USD
The British pound initially tried to recover a bit during the day on Thursday but continues to fail overall. Now that we have pulled back the way we have, it’s possible that we will break down towards the 1.2750 level, an area of importance on longer-term charts from what I see. In general, I believe that short-term traders continue to fade rallies, but we are starting to get a bit oversold so it’ll be interesting to see how much longer this can continue without some type of bounce. That bounce shouldn’t be thought of as an opportunity to start buying, it should be thought of as an opportunity to sell for higher levels. There is far too much in the way of concern out there to think that the British pound can turn things around at the drop of a hat.
