EUR/USD
The EUR/USD pair initially fell on Tuesday, testing the 1.17 level. It did bounce though, showing signs of resiliency again. Simply put, if we break down below the bottom of the candle for the session on Tuesday, I’m a seller as I believe the market will probably go looking towards the 1.15 handle. On the other hand, if we bounce from here I think that the market should continue to reach towards the 1.19 level above. Ultimately, this is a market that continues to see a lot of volatility but I think that the uptrend should stay intact, at least as long as we can stay above the 1.15 handle which is well below current levels.
GBP/USD
The British pound fell significantly during the session on Tuesday, reaching down to the 1.2850 level. That’s an area that should be supportive, at least short-term. If we break down below there I think that the market will then go looking towards the 1.27 level underneath. Ultimately, this is a market that I think will be sold off, and it’s not until we break above the 1.3050 level that I’d be comfortable buying. I believe that the market looks very susceptible to downward pressure, and of course the US dollar has strengthened in general so that is a bit of a “double whammy.” Because of that, it’s probably only a matter of time before we continue to see the bearish pressure jump into the market. With this, I am bearish but I also recognize that we may need to have a short-term bounce in order to pick up “value” in the US dollar. Again though, if we break above the 1.3050 level, I would be willing to buy the British pound at that point.
