The Euro rallied significantly during the trading session on Friday, reaching towards the 1.1250 level before pulling back a bit. That is where the 50 day EMA is currently hanging about, so it makes sense that we would see a bit of a pushback at this handle as well. Beyond that, it’s the top of the 50 pip zone that we had used for support. This area has been resistive as of late, so it makes quite a bit of sense that we would struggle to break above it, especially considering that we were heading into the weekend and a lot of traders would not want to have carried risk over that time.
If we break back down below the 1.12 handle, it’s very likely that we could go down to the 1.1150 level, and then eventually the 1.11 level. However, if we do get a close above the 1.1250 level, this market could go looking for much higher levels, perhaps even as high as 1.14.
The British pound went back and forth during the trading session on Friday, as we continue to hover around the 1.30 level. That’s an area that continues to attract a lot of attention, so it’s not a surprise that it was somewhat neutral. Keep in mind that the UK numbers were pretty good, but we also have a lot of noise coming out of the US/China trade talks. Because of this, it’s quite impressive that we simply hung around this area. At this point, if we can break above the highs of the day I think the market goes looking towards 1.32 handle. The alternate scenario is that we break down below the lows of the day, which could send this market towards the 1.29 level.