EUR/USD
The Euro rose initially during the course of the session on Tuesday, testing the 1.1350 level. However, we pulled back and order to form a shooting star, and as a result it looks as if the sellers have come back into the marketplace. However, we have a FOMC Statement coming out during the day, and that is reason enough for me to step on the sidelines at this moment in time because I know that this market will be extraordinarily volatile. I do think that there is a significant amount of support just below though, especially near the 1.12 handle, so with that being the case, I believe that pullbacks will more than likely be bonds, but we never know what the FOMC Statement will be at a time, so I prefer not to trade before analysis like this as it is essentially akin to gambling.
GBP/USD
The GBP/USD pair rose during the course of the day on Tuesday, clearing the 1.45 level. That being the case, the market looks as if it is trying to break above significant resistance. With that being the case, if we can break above the top of the range for the day on Tuesday, I would be willing to buy the British pound as it looks like it would break much higher. Ultimately, pullbacks should be buying opportunities as long as we can stay above the 1.45 level, and if it is after we are treated to the announcement. Ultimately, this market could go much higher, perhaps reaching the 1.50 level if we can break above the top of the range, and of course pullbacks and have signs of support.
On the other hand, if we broke down below the 1.44 handle, I feel that this market could drop to the 1.41 level as it is the bottom of the previous significant consolidation area, so that of course could be a significant move in and of itself.
