EUR/USD And GBP/USD Forecast – Friday, July 7

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EUR/USD

The EUR/USD pair rallied on Thursday as we continue to see strength in the Euro overall. With today being Nonfarm Payroll Friday, we are likely to see quite a bit of volatility in the US dollar. I believe that the market favors the upside, but we need to break above the 1.15 level to see a longer-term moved to the upside. Once we break above that level, then it becomes a “buy-and-hold” situation. Alternately, if we break below the 1.13 level after the announcement, that should send this pair much lower, perhaps down to the 1.11 handle. Ultimately, this is a market that will be volatile as it typically is during these days, but waiting until the end of the day might be the best thing to do as we see which direction the market wants to go.

GBP/USD

The British pound rallied during the day on Thursday, as we bounced off the downtrend line during the previous session. It looks as if the market is trying to test the 1.3050 level above, and once we get above there, the market should continue to go much higher, the 1.3450 level being my longer-term target. Today of course will be very important, so the daily close will matter. In fact, I believe that we could be setting up for a longer-term “buy-and-hold” situation, and if we do, waiting until the end of the day might be okay as you have a huge upside potential. If we broke down below the 1.29 handle, and more importantly, the downtrend line, the market should reach towards the 1.28 handle. Either way, this market will be very choppy during the day, as this market will be reacting to the interest rate outlook coming out of the United States.