EUR/USD
The EUR/USD pair fell initially during the session on Tuesday, testing the 100-day exponential moving average. We bounced and broke much higher, reaching towards the 1.08 handle. It looks as if we are ready to break out, and if we can break above the top of the range for the session, I feel that the market can go much higher, probably the 1.10 level above. Pullbacks will more than likely find support at the 1.0750 level, or at least the 1.07 level under there. It’s not until we break down below there that I feel comfortable shorting this market again. Because of this, I am bullish for the short term. Longer-term though, I think that the Euro has plenty of issues in general.
GBP/USD
The British pound rallied during the day on Tuesday, testing the 1.25 level. A break above there should be bullish, but it’s not until we break above the 1.26 level that I feel comfortable buying this pair longer term. Once we get that, I feel that the British pound can go much higher. Having said that, breaking above the top of the shooting star from the Monday session was very bullish, and that suggests to me that we have plenty of momentum underneath to finally break out to the upside. However, I’m going to wait until we get the daily close above the 1.26 level to put money to work. Alternately, if we get some type of exhaustive candle in this general vicinity, I may be interested in selling but we must wait for a breakdown after that. Regardless, we are approaching a very serious area, and that should cause quite a bit of volatility in a pair that has a lot of moving pieces now, not the least of which is the Article 50.
