The EUR/USD pair had a volatile session on Friday, initially trying to break above the 1.2350 level, but then pulling back only to bounce again. By doing so, we ended up forming a hammer at the 50-day EMA, which of course is a very bullish sign. We still have the uptrend line and tact as well, and that could bring in buyers also. If we can clear the 1.24 level, then I think we may make a move towards the 1.2450 level, and then eventually the 1.25 handle after that. Remember that this pair tends to be sensitive to risk appetite in general, so that could cause a bit of an issue. If we can break above the 1.25 level, the market should then be free to go much higher, perhaps towards the 1.32 level based upon the measurement of the break out of the bullish flag on the weekly chart.
The British pound initially tried to rally during the trading session on Friday, reaching towards the 1.43 level. That is an area that has been resistance in the past, so that we turned around to form a shooting star, that suggests that we are going to continue to struggle this area, but if we can break above the 1.43 level, and not only when it be a fresh new high, but would also be the market breaking above the top of the shooting star. I believe that we could pull back from here, but if we do I think that the buyers will come back into play, especially with the 1.40 level being so supportive recently. We also have the 50-day EMA in that general vicinity, and I think that the pullback now will simply be an exercise in building up momentum.