The EUR/USD pair initially fell on Friday, but found enough support near the 1.11 level to turn things around and form a bit of a hammer. This of course is a very bullish sign, and I believe that we are now ready to go much higher. Because of this, I am a buyer of this pair in general, and I believe that we are going to go to the 1.13 level next. It doesn’t mean that were going to do it quickly, just that we are going there.
If we broke down below the 1.1050 level, at that point in time I would have to rethink the next move. However, it seems abundantly clear that the Euro is ready to go higher, and therefore all I can do is simply follow that move.
The GBP/USD pair broke higher during the course the day on Friday, clearing the 1.43 level. It now looks as if we are heading to the 1.45 handle, which is the next scene of significant resistance. With that being said, I think that short-term charts might offer selling opportunities, but we certainly don’t see it quite yet. I think we will probably have to reach that large, round, psychologically significant number before we get that. In the meantime, it’s very likely that short-term buyers will continue to push this pair higher to reach that level. If we did pullback from here, it would be a bit of confusion, and a break down below the hammer on the Thursday session should send this market looking to find the 1.40 level below.
The market certainly has been bearish of the longer-term, so because of this I’m not necessarily looking for a longer-term breakout, just more or less a bit of a reprieve for a currency that’s been absolutely pummeled over the last several months. Because of this, I feel that we essentially have a 2 speed trade, meaning shorter-term traders are bullish while longer-term traders are still a bit bearish.