The EUR/USD pair rallied again on Friday, but still has not broken out. However, we are banging on the door of resistance in the form of the 1.15 level. I think that this market will probably make that move in the next session or 2, especially considering that the British pound has already done it. Because of this, I think that short-term pullbacks will be buying opportunities, but eventually we will break above the 1.15 level and go looking towards the 1.18 level longer term. I have no interest in shorting this pair, the US dollar is most certainly on the defensive. Because of this, although I think it will be volatile I believe that buying is the only thing that you can reasonably do.
The British pound finally broke above the 1.3050 level, and it now looks as if we are ready to go towards the top of the other consolidation area just above, which is a sign that we should go to the 1.3450 level. I think that every time we pull back, buyers will come back and look for value. The British pound is looking strong, but more importantly the US dollar looks to be very soft. Because of this, I think it’s only a matter of time before we reach the aforementioned 1.3450 level, which is massively resistive and extends resistance to the 1.35 handle. The 1.30 level below should be a bit of a floor, so I think that pullbacks offer value. The US dollar suddenly looks very soft against most of the major currencies around the world, and the British pound has lead the way. Given enough time, I think that we will not only reach the 1.3450 level above, but even higher levels than that as we look to be changing the overall longer-term trend.