EUR/USD
The EUR/USD pair initially tried to rally during the course of the session on Friday, but turned back around to test the 1.3 level. This is an area that has been supportive in the past, so I’m not really interested in selling at this point. Having said that, the only thing that I am interested in doing is shorting this market given the opportunity, but I believe that we will probably have to see some type of short-term bounce to get the value in the U.S. dollar needed to start selling. If we break down from here, I think there is a significant amount of support between the current level and the 1.07 level to cause significant trouble to sellers. Because of this, I will simply wait for the bounce and then begin to short again.
GBP/USD
This is a very mixed the market at the moment, because depending on which timeframe you look at, you may get completely different signals. After all, the Friday candle initially saw the market going much higher, but then turned back around to form a rather weak looking shooting star. The normally would be reason enough to start selling, but at this point in time I would be a bit leery about shorting considering that we had formed a hammer on the weekly chart. So having said that, I believe that a bounce could be likely but I am more interested in selling this market than buying over the longer term. I think it’s easy to simply just sit on the sidelines and let this market bounce and find resistance at higher levels in order to turn around and continue to sell. On the other hand, if we break down below the hammer on the Thursday session, this market will then probably drop all the way to the 1.40 level without too many issues. I have no interest in buying.
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