EUR/USD
the EUR/USD pair tried to rally during the day on Friday but found far too much in the way of resistance near the 1.1725 level. We turned around to wipe out most of the gains from the previous session, which of course is a negative sign. I think that the market will probably continue a bit lower from here but I also recognize that there is significant support down at the 1.15 handle. In fact, I believe that this market is going to continue to consolidate between 1.15 on the bottom and 1.1750 above. I also believe that the 1.1750 level extends to the 1.18 handle, so we are not technically broken out until we clear that barrier. There are a lot of concerns globally when it comes to trade, so it makes sense that this market goes back and forth.
GBP/USD
The British pound trying to break above what I see as crucial resistance but got repelled during the day. By doing so, it looks like we are going to sit at the previous downtrend line that we broke above. This is interesting, because quite often this will be a sign of support. However, I think that there are so many conflicting reports as to what’s going to happen with the Brexit that it makes sense that there would be a lot of confusion surrounding this market. In general, I believe that a pullback isn’t necessarily a bad thing, but we need to hold the 1.30 level. Reports that the Labour Party might vote against the Brexit negotiated settlement has put a lot of uncertainty into the British pound. However, eventually we should get some type of agreement and any type of certainty should be good for the Sterling.
