EUR/USD
The Euro has been very noisy during the trading session on Thursday, as we broke below the 1.16 level at one point during the day, but then bounced enough to form a hammer like candle. I believe that the market will continue to bounce in the overall larger consolidation area between 1.15 on the bottom and 1.1850 on the top. I believe that the market will continue to be very noisy, and that we will stay in this overall range for the foreseeable future. However, I also recognize that the market is probably best played at the outer edges, and as we are in the middle of the overall range, you are probably best served staying on the sidelines and waiting for an either overbought or oversold condition.
GBP/USD
By contrast, the British pound has broken down significantly during the trading session, slicing through the 1.30 level. That’s a very negative sign, but we did turn around of form a hammer. It is because of this that I believe the buyers are trying to come back into the marketplace and pick this market up. This is a market that I think will continue to be very noisy, as we have a lot of headlines coming out of the United Kingdom that shows just how uncertain the future is. I believe that the market will continue to be noisy, but I also recognize just how important 1.30 level is. I think if you have the ability to hang onto a lot of volatility, you may be looking at a nice buying opportunity down to the 1.29 level underneath, which is the bottom of the “zone” that I think most longer-term traders are paying attention to.