EUR/USD
The Euro rallied initially during the day, breaking the top of the hammer from the previous session on a “risk on” rally started by word that the Chinese were coming to the US. However, people quickly began to understand that China has nothing to do with Turkey, and then we started to see the selling again. By pulling back at the 1.14 level, I think this shows just how difficult it is to rally from here. Not only do I think the 1.14 level is resistance, I also see significant resistance at the 1.15 level, and even more so than what we saw during the day on Thursday. Because of this, and the fact that we are approaching the weekend, I find it very difficult to imagine the people are going to be throwing a lot of money at the Euro.
GBP/USD
The British pound also fell during the day, after initially trying to rally. The 1.2750 level has acted as perfect resistance, and I think at this point we are ready to continue the move lower. The US dollar will probably strengthened during the session today, because nobody wants to put on too much risk heading into the weekend. With that thought in mind, I believe that we will probably break to a fresh, new lows, but even if we don’t I’m not interested in buying this currency heading into the weekend with all of the potential problems. Overall, I believe that the markets will be very difficult to deal with, but most certainly will favor the downside until we get some type of resolution to the Brexit. We don’t have that yet, and at this point I don’t necessarily see that changing anytime soon.
