EUR/USD
The EUR/USD pair gapped lower at the open after the German election results, turned around to fill that gap, and then continue to fall as the verbal saber rattling between the Americans and the North Koreans continue. However, I think there is plenty of support just below to keep the market afloat, so waiting to see some type of bounce or supportive candle to start buying. Ultimately, I think we will break above the 1.20 level but a pullback might be necessary to build up the momentum necessary to break out and continue to go higher. I think that the 1.1850 region is supportive, I believe that the 1.1750 level is also supportive. I believe that the absolute “floor” is closer to the 1.15 level. Given enough time, I anticipate that the market will go looking to the 1.25 handle, as that was the longer-term target after a massive breakout above resistance and consolidation.
GBP/USD
The British pound initially tried to rally as well, but found enough resistance to turn around and form a shooting star. Because of this, I think that the British pound will fall and value in the short term, hopefully looking for some type of support underneath as I believe that the momentum still favors the upside. I believe that the 1.33 level underneath should be supportive, but I also recognize that if we can break above the 1.3650 level above should be a very bullish sign. Ultimately, I think that the market should continue to go higher, showing a massive breakout for bullish traders. Given enough time, I think that the market will then go to the 1.40 level above. Ultimately, this is a market that is very choppy, but I think that the threat of the Bank of England raising interest rates should keep this market afloat.
