EUR/USD
The Euro rallied significantly during the trading session on Friday but found the 1.18 level to be resistive enough to turn the market back around. As you can see, we formed a negative candle, but the body isn’t that big. What this tells me is that the previous downtrend line should offer a bit of support, and I certainly think that the 1.17 level will as well. The question now is whether or not we can break above the 1.18 level, and I would wait until we got a daily close above that level before I would trust that move. Once we do, then we go to the 1.20 level next. The alternate scenario is that we break down below the downtrend line, which of course would be very bearish. If that’s the case, then I look for the market to continue to go back and forth in the consolidation range that we have been in for some time.
GBP/USD
The British pound got absolutely hammered during the trading session on Friday, as Teresa May suggested that there may not be a Brexit negotiated deal. However, I would point out that the previous downtrend line has offered support, and that we stopped right there. Because of this, I think that we are more than likely going to see buyers come back into this market place, but I would be cautious with my position size. If that’s the case, and we rally, you can certainly add as we go along. I believe that the 1.30 level underneath should be massive support as well, and it should be noted that every time we get some massive selloff, the market does turn around. I think that we will continue to see a lot of volatility, so keep that in mind.
