The EUR/USD pair had a bully session again on Wednesday, as traders push the market above the 1.1850 level. It looks to me as if the market is most certainly in a go looking towards the 1.20 level above, and the pullbacks at this point will probably end up being buying opportunities. The market has recently broken out above a major resistance barrier at the 1.15 handle, and with that in mind I think that the measured move to the 1.25 handle over the longer term is still very much possible. That doesn’t mean that we can’t struggle from time to time, but given enough time I think that the sellers will have a hard time hanging on any type of position. Once we can break above the 1.21 level, the market should go to my target. In the meantime, buying on dips continues to be the effective strategy in this pair.
The British pound also ended up having a bullish session on Tuesday, breaking below the 1.32 level, but turning around to recover and form a nice-looking hammer. That area now looks to be supportive, and although there is a certain amount of noise between here and the 1.33 level, I think that the market will break out towards the 1.3650 level longer term, as it was the scene of the meltdown after the surprise vote to leave the European Union. There was a gap there, and markets do fill gaps. If we did try to break above there previously, but struggled enough to turn things around and fall the way we have over the last couple of weeks. Alternately though, the market had been a bit overbought, so I think now we are going to approach that level much more diligently, and eventually Bill the momentum necessary to continue to the upside for the longer-term move.