EUR/USD
The EUR/USD pair broke out during the trading session on Thursday, slicing above the 1.18 level above. By doing so, we triggered a buy signal based upon hammers from the previous 2 sessions, and that means that the market will probably go looking towards the 1.19 level, and then possibly the 1.20 level. I think pullbacks continue to offer buying opportunities, and that there is a significant amount of support down to the 1.17 level underneath. Ultimately, I believe that the market will reach towards the 1.21 handle, and once we break above there the market should continue to go towards the 1.25 level above, which is my longer-term target. I believe that over the longer term, that’s exactly where we’re going but it’s going to be very volatile between here and there. Now that the situation in Spain is coming to a head, I think people are giving a booty confidence to the Spanish government.
GBP/USD
The British pound initially tried to rally during the day on Thursday, but found the 1.3250 level to be resistive. We pull back from there, breaking below the bottom of the hammer from the Wednesday session, but then bouncing. With this tells me is that the market is confused, and is not until we break above the 1.3250 level that I would be convinced to start putting money to work. I think at that point, we will test the 1.33 level above, and a move above that frees this market to go looking towards the 1.35 handle, followed by the 1.3650 level which was the scene of the breakdown from the boat to leave the European Union. Alternately, if we do fall from here, I think we go down to the 1.30 level underneath.
