EUR/USD
The Euro initially fell rather hard during the trading session on Thursday, reaching down to the 1.11 level before turning right back around to show signs of life again. The recovery has been rather extensive and strong, so at this point it’s very likely that we will not be breaking down anytime soon. If we break down below the 1.11 level, it would be a very negative sign. At that point, I think that the market would probably drop down to the 1.10 level. On the other hand, if we can break above the 1.12 level, there is a significant amount of resistance to the 1.1250 level. If we can break above there, then the market could really take off. I suspect though at this point we are probably just going to go back and forth in the 100 point range though.
GBP/USD
The British pound is trying to find some type of support near the 1.26 level, forming a hammer for the day. However, there are so many moving pieces with the Brexit situation right now that I’m very cautious about putting money to work quite yet. I’d much rather by this market at a lower level and one that is much more stable and important on longer-term charts. The 1.25 level underneath is massive support, and therefore that’s what I’m looking for, some type of supportive candle in that area. Even if we do rally from here, the 1.28 level above is significant resistance, but if we break above there then the market would finally be free to go higher. At this point in time though, I think with everything that’s going on around Theresa May is going to be almost impossible to buy this market until we get some type of certainty.
