EUR/USD
The EUR/USD pair went back and forth on Tuesday, eventually forming a relatively neutral candle. Because of this, I don’t have any real desire to trade this market until we break out of this range. If we break down below the bottom of the candle, I think we will reach towards the 1.05 level again. That is an area that should be massive support yet again, but I think given enough time we will break down below there and reach towards the parity level. Alternately, if we break above the top of the candle I feel that we will reach towards the 1.0750 level above, and then perhaps show exhaustion there that we can start selling as well. I have absolutely no interest in buying this pair as the Federal Reserve looks set to raise interest rates, and of course the ECB has recently just extended quantitative easing by 9 months.
GBP/USD
The British pound initially tried to rally on Tuesday, but yet again the 50% Fibonacci retracement level has offered quite a bit of resistance. The 1.27 level seems to be a bit of a ceiling at the moment, but I think that even if we break above there we will find that the 1.2850 level above is massive resistance, which has previously been support. So with this being the case I have no interest in buying this pair and I think that selling opportunities will present themselves yet again. A break down below the shooting star should send this market looking for the 1.2550 level, and perhaps even the previous uptrend line that has defined the recent uptrend that we have seen. I believe that the bounce is significant, but quite frankly it’s just an opportunity to take advantage of value in the greenback going forward. The Federal Reserve raising interest rates more than once comes to light, this pair will reach towards the 1.20 handle yet again.
