EUR/USD
The Euro fell rather hard during the trading session on Thursday as the US dollar strength and quite considerably. That being the case, we are reaching towards the crucial 1.12 level of support, heading into the Good Friday holiday which will have most banks around the world close. With that being the case the liquidity is going to be very thin during the trading session on Friday. It won’t be until Monday that we get some type of true test of support, so it will be interesting to see how we behave. All things being equal, one would expect a bit of a bounce but it’s hard not to notice that we have been drifting lower for some time. The 50 day EMA, pictured in red, continues to be very influential, and of course the 200 day moving average is as well. To the downside, we could be looking at a move to the 1.10 level if we do in fact break down.
GBP/USD
The British pound broke down a bit as well, slicing through the 1.30 level late in the day. If we can break down below the 1.2950 level, that would probably allow the market to reach towards the 1.28 handle, and then possibly even the 1.27 level as we see a lot of support in that area. Ultimately this is a market that doesn’t have much to work with considering that we have now got the six month extension for the Brexit, and now there won’t be much in the way of catalysts.
This just looks like a descending triangle that is ready to kick off, and that’s another reason why I think that the 1.27 level may be eventually targeted. That doesn’t mean that I’m looking for some type of major break down, I think it’s more or less going to be a scenario where we simply just drift lower.
