The EUR/USD pair trying to break out to the upside but turned around to form a shooting star. The 1.24 level seems to be offering resistance, but I think there is support underneath, especially near the 1.23 level. There is a lot of noise underneath, and I think it is only a matter of time before the buyers turn around and go higher. I think that the market will eventually go higher, but a pullback from here should only offer value as the uptrend has been so strong. I look at these dips as an opportunity to get long in a market that I think has already made his longer-term intentions known. At this point, I’m sitting on the sidelines and waiting for volume and more importantly, value.
The British pound initially fell during the trading session on Tuesday, testing the 1.40 level for support. That’s an area that should offer plenty of buying pressure based upon the large, round, psychological importance of the number, and I believe that the market will probably continue to respect that level. The British pound is very bullish right now, and we have obviously seen a lot of buying as of late. The 1.43 level above is significant in its importance, and if we can break above there I think that the market could go to the 1.45 level next. The market should go much higher over the longer term, especially near the 1.50 level. The 1.38 level underneath should be supportive, but at this point I think it’s only a matter of time before the buyers jump in, not only based upon the fact that the British pound has been oversold for quite some time, but the US dollar is in a significant amount of trouble.