The USD/JPY pair went back and forth on Friday, showing quite a bit of reluctance to make any real move. Ultimately, this is a market that should continue to go lower, but we also recognize that a short-term bounce could happen. It’s not until we get above the 150 level that we would be buyers, so we are looking for weakness to sell war break down below the bottom of the range for the session on Friday. Remember that this pair tends to be very sensitive to risk, so pay attention to the stock markets out there.
The EUR/USD pair initially fell during the day on Friday, but bounced in order to form a hammer. This happened on Thursday as well and right at the 1.1050 level where we would anticipate seeing quite a bit of support. With that being the case, the market looks as if it is ready to continue going higher now. If we can break above the top of both hammers, the market should then try to reach towards the 1.13 level, perhaps even higher than that. Ultimately, you have to look at this area as the scene of a significant breakout recently, and it now looks like it has been retested for support.
The GBP/USD pair initially fell during the day on Friday but found enough support near the 1.4250 level to turn things around and form a bit of a hammer. At this point in time, it looks like we will probably bounce. However, there is a significant amount of resistance above that should continue to work against the value of the British pound. We are sellers on exhaustive candle above, and not interested in buying at this point. We recognize the 1.45 level is where we start to see serious selling opportunities going forward.