EUR/USD
The Euro rallied during the course of the day on Tuesday, breaking well above the 1.12 level that I suggested could be resistive. The fact that we broke above there tells me that we are starting to see renewed strength in the Euro again, and on top of that we even managed to come close to the 1.1350 level that I suggested could be the target on the breakout. We pulled back rather significantly towards the end of the day I think what we are getting ready to see is more momentum building on a drop lower. Because of this, I think that you have to be looking for buying opportunities now, but on short-term charts only. For myself, I tend to try to look for better trends then I am seeing in this pair at the moment.
GBP/USD
The British pound get a nice bounce during the course of the day on Tuesday, breaking above the 1.30 level again. However, there is quite a bit of noise above and ultimately, resistance. With this, I believe it is only a matter of time before the sellers reenter this market, and punish the British pound once again. Because of this, it’s likely that the market will continue to rally based upon strong candle that we have seen for the day on Tuesday, but I believe at the first signs of exhaustion the sellers will jump right back into this marketplace and continue the longer-term downtrend.
After the breakdown, it does make sense that we got a little bit of a bounce and of course this is exacerbated by the fact that people are starting to question whether or not the Federal Reserve can raise interest rates anytime soon. I don’t think they will, but they don’t have to worry about leaving the European Union as the British do. Ultimately, this is a downtrend that should continue.
