EUR/USD
The Euro initially fell during the day on Friday, but turned around to form a slightly positive candle. By doing so, looks as if we are trying to break the resistance that we’ve seen recently in the region of 1.1250 or so. If we can get above there, we could reach towards the 1.1350 level, but it would take quite a bit of momentum to get to that point. I think once we do, and then will have to ask are questions, but at this point in time I suspect that there is probably going to be an exhaustive candle given enough time, and that we will more than likely end up selling. After all, even though we have shown some positivity over the last couple of days, you can almost make an argument for a bit of a descending triangle this point. Ironically, this market seems to be mimicking the WTI Crude Oil market.
GBP/USD
The British pound of course got a hammer during the Friday session, as we continue to punish the Pound for the exit vote. Quite frankly though, I feel we are at the bottom part of a larger consolidation area, so would not be surprising at all to see a little bit of a bounce at this point. I look at that bounce as an opportunity to start selling at higher levels though, and will not be participating in trying to go long. I think that given enough time we could break down below the 1.2850 level, and once we do we could drop significantly down to the 1.25 handle. Until then, I would assume that rallies are to be sold, and simply waiting for a pickup in momentum to the downside is essentially what we’re going to be doing. At this point, I see very little likelihood of buying this pair.
