EUR/USD
The Euro fell during the trading session on Friday, as we continue to see a lot of concern around the world with trade negotiations and worse yet, trade tariffs against China. Beyond that, we have a lot of concerns when it comes to emerging-market contagion in the European Union banking sector, which has weighed upon the Euro for some time. The weekly candle stick is a bit of a shooting star, so it looks as if we are going to get a pullback from this region of resistance just above. I’m not calling for a meltdown or anything, but I think that it would make sense to pull back to the 1.15 level. That’s an area where I expect to see buyers coming back into pick up value. However, if we break through there the market will unwind much quicker. It looks as if we are going to see overall US dollar strength for the next couple of days.
GBP/USD
There is a downtrend line that the market has respected just above the 1.30 level, and at this point I think that the British pound is going to pull back. The question now is whether or not we get noise out of the Brexit that could help the British pound? However, if we were to break out above the downtrend line, the market should continue to go much higher. Otherwise, we will probably test the 1.2750 level underneath, which should be rather supportive in and of itself. If we break out to the upside, I anticipate that the market probably goes looking towards the 1.35 level over the longer-term. There are so many moving pieces right now, I would keep that position rather small, whichever direction you choose to put it in.
