The EUR/USD pair rallied a bit during the session on Thursday, as Americans would have been away for Thanksgiving. I believe that ultimately the market is going to continue to go higher though, and the pullback should offer buying opportunities. The 1.17 level underneath continues to be support, as it has significance from both a support and resistance level recently. The neckline from the head and shoulders pattern should now be massively supportive. The market looks likely to reach towards the highs again at the 1.21 level, so I like buying short-term dips to give us an opportunity to take advantage of a falling US dollar as the US Congress cannot get the tax bill finish, and that of course has been weighing against the greenback in general.
The British pound initially fell during the trading session on Thursday, but found enough support to turn around and form a bit of a hammer. The hammer of course is a bullish sign if we can break above the top of it. A clearance of the top of the hammer, which is also a clearance of the resistance barrier at 1.3333, signifies that we should continue to go much higher, and perhaps reach towards the 1.35 level next. That is my longer-term thesis, but I recognize that we could get a pullback occasionally. Given enough time, I expect that we are going back to the highs at the 1.3650 level. A break above there has this more of a “buy-and-hold” situation. Given enough time the, we should find plenty of buying opportunities based upon value. I have no interest in shorting this market unless we broke down below the 1.320 level, which could send this market down to the 1.30 level underneath.