EUR/USD
The EUR/USD pair initially fell during the trading session on Thursday, but found enough buying pressure near the 1.18 level to turn around and rally. By doing so, looks likely that we are going to continue to go higher, perhaps reaching towards the 1.21 level over the longer term. Expect volatility though, as we are trying to break above a massive amount of resistance. Regardless, I think is even more support, all the way down to the 1.17 level underneath. In fact, I like buying this market on dips, and because it gives you an opportunity to take advantage of value. Longer-term, if we can break above the 1.21 level, it’s likely that the market will extend all well the way to the 1.32 handle, based upon a bullish flag would have broken out. Pullbacks from here are not sold until we break down below the 1.16 handle.
GBP/USD
The British pound rallied significantly during the day on Thursday as well, reaching above the 1.35 handle. It looks obvious that we are trying to break out, and eventually we will probably take out the 1.3650 level. At this point, I like buying this pair on short-term pullbacks, that show signs of life. We could drift down towards the 1.3333 handle, which is more than likely going to be the floor. I like the idea of picking up those dips as an opportunity to take advantage of very bullish trend and at value. If we break down below the 1.3333 handle, then I think the market would probably test the uptrend line that is below. In general, this is a market that I have no interest in shorting as I believe the British pound is trying to continue its way much higher.
