EUR/USD
The EUR/USD pair had a volatile session during the day on Tuesday, but found enough support to turn around and form a nice-looking hammer. Because of this, I believe that if the market can break above the 1.12 level, and it certainly looks as if it could, the market will continue to go higher and one could make an argument for a bullish flag being formed on the daily chart now. Because of this, if we break out to the upside the market could go as high as the 1.1450 level. Selling is all but impossible, as the Euro continues to strengthen in general. Selling would only offer value in my estimation and I believe that the 1.10 level underneath is very supportive. Ultimately, it will be volatile, but I do think that the buyers take over.
GBP/USD
The GBP/USD pair had a volatile session during the day on Tuesday, as we continue to try and decide whether or not the British pound has stabilized. I believe it has, and a move above the 1.29 level should send this market much higher, reaching towards the 1.3050 level, and then a break above there sends us towards the top of the longer-term consolidation area which is near the 1.3450 level. Pullbacks remain supported as far as I can see, and the 1.2750 level underneath should be massive support as it was previously massive resistance. As soon as we broke above there, the market looks very healthy, and this recent pullback will probably be looked at as a value proposition longer-term, as traders have jumped right back into the action. Looking forward, it will be volatile but there should continue to be buyers underneath as the markets will be looking for the value in the British pound that should continue to direct this market longer term.
