EUR/USD
The Euro broke down during the day on Friday again, but did find buyers underneath the 1.16 level. Because of this, we turned around of form a bit of a supportive looking candle, and I think at this point it’s obvious that we are simply bouncing around between the 1.15 level underneath, and the 1.15 level above. This consolidation has been rather crucial, and I think it’s only a matter time before we go back and forth to respect these levels. Looking at this market, it’s trying to figure out where to go next, and therefore I think all you can do is play this as a range bound situation. The closer we get to the 1.15 level, the more likely I am to start buying. At this point, this pair has become very difficult to trade for anything more than a short-term move.
GBP/USD
The British pound has broken down significantly during the day on Friday as well, forming a shooting star for the week. However, the Friday candle tells a conflicting story as we had reached towards the 1.30 level and bounced above the downtrend line. Ultimately I think that this market will continue to go much higher, but a break down below the 1.30 level cannot be ignored. That would be a longer term selling signal and therefore we have to start shorting this pair. I think the next 24 hours are going to be crucial and we will have to see how this market reacts if it gets closer to the 1.30 level again. Overall, there’s more reward to risk ratio possibilities to the upside, but below 1.30, the British pound looks very soft again.
