EUR/USD
The EUR/USD pair went back and forth during the trading session on Tuesday, but found enough support underneath to turn around and form a hammer. The hammer of course is a bullish sign, but it looks like the 1.17 level above could offer resistance. It is the scene of the previous neckline on the daily timeframe, so I think that a breakdown below there should send this market lower of longer term. However, we may get a little bit of a bounce in the short term, in order to start selling yet again as it should send the market down to the 1.13 level. The measured move suggests that we are going down to that area, and a breakdown below the bottom of the hammer would also send this market down to that level. I have no interest in buying this pair until we break above the 1.18 level currently. However, once we reach the 1.13 level underneath, I think the buyer could return.
GBP/USD
The British pound fell initially during the trading session on Tuesday, but turned around to form a nice-looking hammer. The hammer suggests that we are going to go looking towards the 1.3333 level again, but a breakout above there would also send this market even higher, perhaps testing the 1.3650 level again, which was the scene of a gap lower after the surprise vote believe the European Union. I believe that the hammer suggests that we are more than likely going to go higher, and I think that if we can stay above the 1.30 level underneath, it’s likely that we will continue to find a reason to go higher. If we did breakdown below that level, it’s likely that the market could breakdown rather significantly and substantially down to the 1.2750 level.
