EUR/USD
The EUR/USD pair was very noisy during the trading session on Monday, dropping down towards the 1.22 handle. However, we turned around to form a bit of a bounce, and it looks as if we are trying to go higher. In the meantime, I anticipate that we are going to see a bit of consolidation so that the market can build up the necessary momentum to reach towards the 1.24 handle above, and then eventually the 1.25 level after that. I think that pullbacks should be thought of as value, at least as long as we are above the 1.20 level. If we break down below there, then I believe that the market could breakdown. It seems to be very unlikely though, so I continue to think of dips as buying opportunities. The US dollar looks vulnerable longer-term, and I believe it’s only a matter of time before reach towards 1.25 above.
GBP/USD
The British pound broke to the upside during Monday trading, as it looks like we are prepared to take on the psychological barrier at 1.40 above. I think pullbacks offer buying opportunities, down to the 1.37 level underneath. The market should be bullish longer-term, and I believe that any pullback is going to give us an opportunity to pick up value, as the US dollar has looked very soft against most currencies, while the British pound seems to be being bought because of its historically cheap pricing.
Recently, we broke above the 1.3650 level, and that gave me the impression that we were ready to go much higher. I currently have a target of 1.50 longer-term and expect to see that level by the time we get to the end of the year. This is a market that I think will make a lot of careers this year.
